%0 Report
%A Marrero, Gustavo A.
%A Novales Cinca, Alfonso Santiago
%T Growth and welfare : distorting or non-distorting taxes
%J Documentos de trabajo del Instituto Complutense de Análisis Económico (ICAE)
%D 2001
%U https://hdl.handle.net/20.500.14352/64464
%X Se demuestra que recaudar impuestos sobre la renta puede resultar una mejor alternativa que financiar el gasto público con impuestos de suma fija, en un modelo de crecimiento endógeno de un sector con gasto público productivo e improductivo y bajo ciertas restricciones fiscales realistas.AbstractIn an infinitely-lived framework, taxing capital income may be growth and welfareenhancing when it allows for correcting distorting externalities in the competitiveequilibrium allocation. This is the case when public capital is subject to congestionby private capital or total income [Fisher and Turnovsky (1998)] or when governmentexpenditure exerts an external effect on physical capital [Corsetti and Roubini(1996)]. However, none of these features appear in simple one-sector endogenousgrowth models with public capital. Alternatively, we consider certain realistic fiscalpolicy constraints in a simple one-sector growth model with productive and unproductivepublic expenditures, to show that raising revenues through factor incometaxes may be preferred to using lump-sum taxes.
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