Comprehensive income taxation, investments in human and physical capital, and productivity

Marc Nerlove, Assaf Razin, Efraim Sadka, Robert K. von Weizsäcker

Research output: Contribution to journalArticlepeer-review

31 Scopus citations

Abstract

This paper analyses the implications of the comprehensive income tax for the accumulation of human and physical capital and for the overall productivity level of the economy. A comprehensive income tax, applying to both labour income and capital income, is shown to discriminate against investments in human capital relative to investments in physical capital. It has an adverse impact on human capital accumulation and lowers productivity.

Original languageEnglish
Pages (from-to)397-406
Number of pages10
JournalJournal of Public Economics
Volume50
Issue number3
DOIs
StatePublished - Mar 1993
Externally publishedYes

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