Redistributing from capitalists to workers: An impossibility theorem

posted by
March 11, 2013
by Garett Jones  
Posted in Commentary

"There's an old story about a mathematician asking Paul Samuelson for one idea in economics that was simultaneously true and not obvious. Samuelson's answer is here. Today, I've got another: The Chamley-Judd Redistribution Impossibility Theorem. Chamley and Judd separately came to the same discovery: In the long run, capital taxes are far more distorting that most economists had thought, so distorting that the optimal tax rate on capital is zero." (03/09/13)  

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