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Shigeo Morita and Takuya Obara
 
''Optimal capital income taxation in the case of private donations to public goods''
( 2018, Vol. 38 No.2 )
 
 
In this study, we investigate optimal nonlinear labor and capital income taxation and subsidies for contribution goods in a dynamic setting. We show that when individuals can contribute to a public good--even if additive and separable preference between consumption and labor supply is assumed and individuals differ only in earning ability--marginal capital income tax rate for low-income earners is not zero, indicating that the Atkinson-Stiglitz theorem does not hold.
 
 
Keywords: Capital income tax, Private donations, Tax treatment
JEL: H2 - Taxation, Subsidies, and Revenue: General
H3 - Fiscal Policies and Behavior of Economic Agents: General
 
Manuscript Received : Jun 05 2017 Manuscript Accepted : Apr 30 2018

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