TY  - JOUR
AU  - Acemoglu,Daron
AU  - Golosov,Mikhail
AU  - Tsyvinski,Aleh
TI  - Political Economy of Ramsey Taxation
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15302
PY  - 2009
Y2  - August 2009
UR  - http://www.nber.org/papers/w15302
L1  - http://www.nber.org/papers/w15302.pdf
N1  - Author contact info:
Daron Acemoglu
Department of Economics
MIT, E52-380B
50 Memorial Drive
Cambridge, MA  02142-1347
Tel: 617/253-1927
Fax: 617/253-1330
E-Mail: daron@mit.edu

Mikhail Golosov
Department of Economics
Princeton University
111 Fisher Hall
Princeton, NJ 08544
Tel: 609/258-4003
Fax: 609/258-6419
E-Mail: golosov@princeton.edu

Aleh Tsyvinski
Department of Economics
Yale University
Box 208268
New Haven, CT  06520-8268
E-Mail: a.tsyvinski@yale.edu
AB  - We study the dynamic taxation of capital and labor in the Ramsey model under the assumption that taxes and public good provision are decided by a self-interested politician who cannot commit to policies. We show that, as long as the discount factor of the politician is equal to or greater than that of the citizens, the Chamley-Judd result of zero long-run taxes holds. In contrast, if the politician is less patient than the citizens, the best (subgame perfect) equilibrium from the viewpoint of the citizens involves long-run capital taxation.
ER  -