A progressive capital income tax — a bad idea, or just a useless idea? Lessons for Bulgaria (1999-2018)

Aleksandar Vasilev; Aleksandar Vasilev

doi:10.3934/NAR.2020024

National Accounting Review

2020, Volume 2, Issue 4: 402-411. doi: 10.3934/NAR.2020024

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Research article

A progressive capital income tax — a bad idea, or just a useless idea? Lessons for Bulgaria (1999-2018)

Aleksandar Vasilev ^,

Accountancy, Finance and Economics Department, Lincoln International Business School, University of Lincoln, UK

Received: 12 October 2020 Accepted: 26 December 2020 Published: 28 December 2020
JEL Codes: E32, E62

Progressive capital income taxation is introduced into a real-business-cycle (RBC) model with fiscal policy. The artificial economy is calibrated to Bulgarian data for the period 1999–2018. The quantitative role of progressive taxation on capital income is investigated in light of its possible stabilization role in Bulgaria over the business cycle. Unfortunately,the quantitative effect of the presence of such a tax turned out to be very small,and thus not important for either business cycle stabilization,or public finance issues.
- business cycles,
- progressive capital taxation,
- calibration,
- simulation,
- Bulgaria
Citation: Aleksandar Vasilev. A progressive capital income tax — a bad idea, or just a useless idea? Lessons for Bulgaria (1999-2018)[J]. National Accounting Review, 2020, 2(4): 402-411. doi: 10.3934/NAR.2020024

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Abstract

Progressive capital income taxation is introduced into a real-business-cycle (RBC) model with fiscal policy. The artificial economy is calibrated to Bulgarian data for the period 1999–2018. The quantitative role of progressive taxation on capital income is investigated in light of its possible stabilization role in Bulgaria over the business cycle. Unfortunately,the quantitative effect of the presence of such a tax turned out to be very small,and thus not important for either business cycle stabilization,or public finance issues.

References

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