Working Paper: NBER ID: w0877
Authors: Martin Feldstein
Abstract: This paper is an introductory chapter to a book that brings together 22 of my papers written between 1965 and 1981. The chapter provides a summary of each paper and a more general discussion of the role of taxation in influencing the process of capita1 accumulation. The four sections of the book are: (1) Household and Corporate Saving; (2) Portfolio Behavior; (3) Business Investment and (4) Tax Incidence in a Growing Economy.
Keywords: capital taxation; capital accumulation; economic behavior; saving; investment
JEL Codes: H21; H25
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| tax rules (H20) | capital accumulation (E22) |
| higher effective tax rates on capital income (D33) | reduced levels of saving (E21) |
| tax wedge (H29) | distorts saving decisions (D15) |
| increasing taxation of consumption or labor income while decreasing taxation of capital income (H31) | alter saving behaviors (D15) |
| corporate tax rules (K34) | distort financial decisions (G41) |
| distorted financial decisions (G41) | higher level of retained earnings (G32) |
| higher level of retained earnings (G32) | affects total private saving (E21) |
| changes in capital gains taxation (F38) | influence the selling behavior of investors (G41) |
| higher tax rates (H29) | discourage the realization of gains (H31) |
| discouraging the realization of gains (H31) | affects market behavior and capital allocation (G41) |