Robert Waldmann — Optimal Taxation of Capital Income 2019 (let them Bern)

...the standard Judd 85/86 result that the optimal rate of taxation of capital income* goes to zero as time goes to infinity is what mathematicians call a boo boo (oopsie). The asserted theorem is false as explained by Ludwig Straub and Ivan Werning.…

Angry Bear
Optimal Taxation of Capital Income 2019 (let them Bern)

Robert Waldmann

See also

* We just raised the federal tax rate on capital gains and dividends from 15 percent to 23.8 percent, but most economists say these tax rates should be zero. Same goes for the corporate income tax.

Garett Jones explains, via the theoretical work of Christophe Chamley and Kenneth Judd:

Economists can't even get the math right? Oh, my!

Tax Foundation
Standard Economics Says Capital Income Taxes Should Be Zero

William McBride