Abstract
This paper describes the short-run and long-run effects of various capital income taxes on welfare using an overlapping-generations model according to the ‘new view’. It is in the nature of a survey, because some of the results from seminal papers in this field can be achieved, under weaker assumptions. The paper reaches the paradoxical and intriguing conclusion that the distortionary effects of a dividend tax in the long run and of capital gains tax in the short run improve economic welfare, and exceed the income effects. JEL Classification Numbers: G3, H2.
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