TY  - JOUR
AU  - Roubini,Nouriel
AU  - Milesi-Ferrett,Gian Maria
TI  - Optimal Taxation of Human and Physical Capital in Endogenous Capital Models
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4882
PY  - 1994
Y2  - October 1994
UR  - http://www.nber.org/papers/w4882
L1  - http://www.nber.org/papers/w4882.pdf
N1  - Author contact info:
Nouriel Roubini
Department of Economics, KMC 7-83
Stern School of Business, New York University
44 West 4th Street
New York, NY  10012
Tel: 212/998-0886
Fax: 212/995-4218
E-Mail: nroubini@stern.nyu.edu

Gian Maria Milesi Ferretti
International Monetary Fund
Western Hemisphere Department, HQ1-10-120
700 19th Street, N.W.
Washington, DC 20431
Tel: 202 623-7441
Fax: 202 589-7441
E-Mail: gmilesiferretti@imf.org
AB  - This paper studies the effects of human and physical capital income taxation on growth, and examines how these effects depend on the technologies for human capital accumulation and 'leisure'.  It then derives the normative implications of the analysis for the optimal taxation of factor incomes.  It is shown that in general both capital and labor (human capital) taxes are growth-reducing.  In these cases, the optimal long-run tax on both capital and labor income is zero.  The optimal taxation plan consists of taxing both factors in the short run, and financing spending in the long run through accumulated budget surpluses.
ER  -