The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Taxation of Capital

  • Christophe Chamley
Reference work entry


Taxes on the income from capital have generated a large debate for two reasons. First, the contrast between the arguments for efficiency and equity seems to be particularly sharp here. Second, there exists a variety of views on the appropriate choice of an economic model and its parametric values that are relevant for policy. In this exposition, emphasis will be put on the dynamic aspects of a uniform tax on capital in general equilibrium. In most economies the tax on capital discriminates between different sectors (corporate capital, housing) and induces some static efficiency cost. This cost will be considered only very briefly in comparison with the dynamic efficiency cost.

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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Christophe Chamley
    • 1
  1. 1.