Optimal Taxation of Capital in the Presence of Declining Labor Share

• 成果类型: Article
• 署名作者: Atesagaoglu, Orhan Erem; Yazici, Hakki
• 署名单位: Sabanci University; University of Bristol
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12766
• 发表日期: 2025
• 页码: 1079-1097
• 关键词: MARKET POWER; income; returns; TRENDS; micro; fall; rise

摘要

We analyze the implications of the decline in labor's share in national income for optimal Ramsey taxation. It is optimal to accompany the decline in labor share by raising capital taxes only if the labor share is falling because of a decline in competition or other mechanisms that raise the share of pure profits. This result holds under various alternative institutional arrangements that are relevant for optimal taxation of capital income. A quantitative application to the US economy shows that soaring profit shares since the 1980s can justify a significantly increasing path of capital income taxes.