Capital Taxation in the 21st Century

27 Pages Posted: 20 Jan 2015 Last revised: 13 Jul 2023

See all articles by Alan J. Auerbach

Alan J. Auerbach

University of California, Berkeley - Department of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Kevin A. Hassett

American Enterprise Institute (AEI)

Date Written: January 2015

Abstract

In his influential book, Capital in the 21st Century, Thomas Piketty argues forcefully that rising wealth and wealth inequality is an inherent characteristic of capitalist economies and calls for strong policy responses, in particular a substantial wealth tax implemented globally. This paper takes issue with the facts, logic, and policy conclusions in Piketty’s book, suggesting that the factors needed to support the inexorable rise in capital’s share and concentration are lacking and that among tax policy reforms aimed at dealing with economic inequality a wealth tax finds little support either in Piketty’s own work or elsewhere in the literature.

Suggested Citation

Auerbach, Alan Jeffrey and Hassett, Kevin A., Capital Taxation in the 21st Century (January 2015). NBER Working Paper No. w20871, Available at SSRN: https://ssrn.com/abstract=2551679

Alan Jeffrey Auerbach (Contact Author)

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Kevin A. Hassett

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