Tax Reform, Interest Rates and Capital Allocation
45 Pages Posted: 5 Jul 2004 Last revised: 4 Mar 2021
Date Written: September 1985
The impacts of four major tax reform proposals on the level of interest rates and the allocation of the American capital stock are derived. The four plans are Bradley-Gephardt, Kemp-Kasten, Treasury I and Treasury II. The allocation is among seven types of nonresidential capital, rental housing, and owner occupied housing held by households in five different income classes.The inflation-neutrality of the four plans as also deduced.
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