Introduction

Income from capital receives uneven treatment in both the tax system and the loan markets. This affects almost every investment decision made by individuals, businesses, and the government and causes major disruptions in the economy.

About the Book

In this book, C. Eugene Steuerle shows how the misallocation of capital results from the interaction of tax laws, the operation of the market for loanable funds, and inflation.

Analysis and Focus

He first analyzes the taxation of capital income, focusing on the distortions caused by tax arbitrage and on inflation-induced discriminations among both taxpayers and borrowers.

Application and Conclusion

The author then applies this analysis to several related issues. He concludes with a reform agenda that calls for the adoption of a broader-based, flatter-rate income tax.