Optimal Taxation, Economic Growth and Income Inequality

That there is a trade-off between equity and efficiency (economic growth) is well known. Two models have been developed that link government spending and taxation to economic growth. This paper uses these models to provide estimates of the growth-maximizing tax rate. Then, a two equation structural...

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Veröffentlicht in:Public choice 2003-06, Vol.115 (3/4), p.299-312
1. Verfasser: Scully, Gerald W.
Format: Artikel
Sprache:eng
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Zusammenfassung:That there is a trade-off between equity and efficiency (economic growth) is well known. Two models have been developed that link government spending and taxation to economic growth. This paper uses these models to provide estimates of the growth-maximizing tax rate. Then, a two equation structural model is developed and estimated that is used to find the trade-off rate between economic growth and income inequality and the growth-maximizing level of income inequality for the United States over the period 1960-1990.
ISSN:0048-5829
1573-7101
DOI:10.1023/a:1024223916710