Template-type: ReDIF-Paper 1.0
Author-Name: Gustavo A. Marrero
Author-Name: Alfonso Novales 
Author-Email: anovales@ccee.ucm.es
Author-Person: pno7
Author-Workplace-Name: Departamento de Economía Cuantitativa, Universidad Complutense de Madrid,
Title: Growth and welfare: Distorting versus non-distorting taxes
Abstract: In an infinitely-lived framework, taxing capital income may be growth and welfare 
	enhancing when it allows for correcting distorting externalities in the competitive 
	equilibrium allocation. This is the case when public capital is subject to congestion 
	by private capital or total income [Fisher and Turnovsky (1998)] or when government 
	expenditure exerts an external e.ect on physical capital [Corsetti and Roubini (1996)]. 
	However, none of these features appear in simple one-sector endogenous growth models 
	with public capital. Alternatively, we consider certain realistic fiscal policy constraints 
	in a simple one-sector growth model with productive and unproductive public expenditures, 
	to show that raising revenues through factor income taxes may be preferred to using lump-sum taxes.
Classification-JEL: E0, E6, O4
Keywords: Endogenous growth, distorting taxes, public investment.
Note:

Length: 27 pages
Creation-Date: 2001
X-File-Ref: http://america.sim.ucm.es/repec/ucm/ref/doicae0105.txt
File-URL: https://eprints.ucm.es/id/eprint/6789/1/0105.pdf
File-Format: Application/pdf
Handle: RePEc:ucm:doicae:0105