NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

How to Protect Future Generations Using Tax Base Restrictions

Antonio Rangel

NBER Working Paper No. 9179
Issued in September 2002
NBER Program(s):Public Economics

This paper studies constitutional restrictions on the tax base that protect future generations from expropriation and improve the optimality of investment in Intergenerational Public Goods (IPGs). The choice of the tax base matters because it affects how intergenerational (IG) spillovers are capitalized into assets that are owned by current generations, and thus the IG politics. We show that with an income tax base, present generations expropriate future generations and produce inefficiently low levels of IPGs. By contrast, with a land tax base, IG expropriation using debt is impossible, the level of investment in IPGs is higher and, for some types of IPGs, Pareto optimal.

download in pdf format
   (2187 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w9179

Published: Rangel, Antonio. "How To Protect Future Generations Using Tax-Base Restrictions," American Economic Review, 2005, v95(1,Mar), 314-346.

Users who downloaded this paper also downloaded* these:
Rangel and Zeckhauser w6949 Can Market and Voting Institutions Generate Optimal Intergenerational Risk Sharing?
Bernheim, Carman, Gokhale, and Kotlikoff w8544 The Mismatch Between Life Insurance Holdings and Financial Vulnerabilities: Evidence from the Survey of Consumer Finances
Lewis w17609 Immigrant-Native Substitutability: The Role of Language Ability
Hall R&D Tax Policy During the 1980s: Success or Failure?
Morck and Steier The Global History of Corporate Governance: An Introduction
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us