Notes on the Tax Treatment of Human Capital

25 Pages Posted: 19 Jun 2004 Last revised: 29 Oct 2022

See all articles by Michael J. Boskin

Michael J. Boskin

Stanford University - The Hoover Institution on War, Revolution and Peace; National Bureau of Economic Research (NBER)

Date Written: November 1975

Abstract

Section 1 presents a preliminary attempt at clarifying the ways in which taxes affect human capital accumulation. Section 2 outlines a simple general equilibrium model with two capital goods - physical and human â€" and the saving corresponding to each, to begin to deal with these issues. Once human capital is viewed as an alternative source of wealth and hence human capital investment as a source of current saving (re-sources withdrawn from current consumption to help increase future output),the old issue of the differential tax treatment of alternative types of capital arises. Sensible tax policy with respect to the taxation of either physical or human capital must take into account the tax treatment of the alternative asset. Section 3 outlines some points of departure for such an analysis.

Suggested Citation

Boskin, Michael J., Notes on the Tax Treatment of Human Capital (November 1975). NBER Working Paper No. w0116, Available at SSRN: https://ssrn.com/abstract=242119

Michael J. Boskin (Contact Author)

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