Journal of Economics

, Volume 107, Issue 2, pp 157–181 | Cite as

Why is mobile capital taxed?

Article
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Abstract

The government for a jurisdiction has both capital and labor taxes at its disposal. It taxes mobile capital to finance the public good despite the desire to attract capital and despite the tax on immobile labor if capital incomes are distributed more unequally than labor incomes among the residents of the jurisdiction. The result extends to progressive taxes and to pure redistribution.

Keywords

Mobile capital Capital tax Labor tax 

JEL Classification

H71 H72 H73 
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Copyright information

© Springer-Verlag 2011

Authors and Affiliations

  1. 1.Department of EconomicsSan Diego State UniversitySan DiegoUSA

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