Document Type
Article
Abstract
Growth in the human capital sector's productivity explains in part how US postwar growth and welfare could have increased while US tax rates declined. Modeling tax evasion within an endogenous growth model with human capital, an upward trend in goods and human capital sectors gradually decreases tax evasion and allows for tax rate reduction. Using estimated goods and human capital sectoral productivities, the model explains 30 percent of the actual decline in a weighted average of postwar US top marginal personal and corporate tax rates. The productivity increases are asymmetric in a fashion related to that of McGrattan and Prescott. © 2014 by The University of Chicago. All rights reserved.
Publication Date
1-1-2014
ISSN
19328575
Publication Title
Journal of Human Capital
Volume
8
Issue
1
First Page
42
Last Page
79
DOI
10.1086/675328
Recommended Citation
Gillman, Max and Kejak, Michal, "Tax evasion, human capital, and productivity-induced tax rate reduction" (2014). Department of Economics Faculty Works. 2.
DOI: https://doi.org/10.1086/675328
Available at:
https://irl.umsl.edu/econ-faculty/2