Doyens 22
More on the Taxation of Capital
Pedro Teles (Universidade Católica Portuguesa)
(Joint paper with V. Chari and Juan Pablo Nicolini)
Should capital income taxes be zero in the long run, as argued by Chamley (1986) and Judd (1985)? Or should instead capital be heavily taxed as suggested by Straub and Werning (2015)? We revisit the Ramsey literature on the optimal taxation of capital and make again the case for a zero tax on capital income, in the steady state and along the transition.