96-F-7. Ihori, Toshihiro, "Taxes on Capital Accumulation and Economic Growth", Apr. 1996.

This paper investigates the effect of taxation on capital accumulation using an endogenous growth model with an altruistic-bequest motive. When bequests are not operative, an increased tax on human capital may not reduce the rate of economic growth, while a tax increase on physical capital will reduce the growth rate. If bequests are operative, a tax on life-cycle capital will not affect the growth rate, while a tax increase on transfer capital will reduce the growth rate. This paper also examines how to attain the first best solution given its operative assumptions.