| Abstract : | The main goal of my dissertation is to present analytically the literature related to optimal capital income taxation and examine if it is optimal for the tax policy of the government to set capital income tax rate equal to zero in the long run.For this reason, I will solve a dynamic optimal taxation Ramsey model that features agents with infinite lives,in order to extract the famous Chamley-Judd result. Furthermore, I will try to discuss the impact that the Chamley-Judd result has on the literature of optimal taxation. Finally, my last task is to check the robustness of the celebrated result under a variety of model extensions. These extensions will provide a better insight into our analysis and will help us reach crucial concluding remarks for the research topic of zero capital income taxation.
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