***Please note that this seminar will be taking place in MacKinnon 720, not MacKinnon 318.

Title: "Capital Income Taxation and the Household"

Abstract:

There has been consistent support among economists for the propo-sition that capital income should not be taxed. This implies replacing labour earnings plus capital income by consumption expenditure as the tax base. The economic arguments in support of this are generally based on models of single person households with a life cycle de.ned on age. This paper considers the merits of these proposals in the context of a family model of the household, with a life cycle de.ned on three main phases of family life, and where the capital market is imperfect. We show

that the proposals would make second earners, who are predominantly women, worse o¤, and could actually reduce saving in the aggregate. We argue instead for progressive taxation of both labour and capital incomes, though not necessarily at the same rates.