Abel on Capital Taxes
A friend recommends this new paper by Andy Abel. Andy says it is nondistortionary to tax capital income, as long as you allow new capital investments to be expensed.
I think this is akin to the old argument that, from an efficiency standpoint, you should sock it to old capital but be nice to new capital.
I think this is akin to the old argument that, from an efficiency standpoint, you should sock it to old capital but be nice to new capital.
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