Because it taxes and spends, the welfare state is by definition redistributive, but this does not automatically entail that it creates more equality. A quick historical glance at social reform will dispel of any notion that the welfare state was pursued for egalitarian reasons. Its foundations were typically laid by conservative reformers who, like Bismarck, sought primarily to reproduce, rathe...

abstract t he return of capital is fundamental to the intertemporal allocation of resources by changing the consumption behavior and capital accumulation over time. taxation on return of capital increases the marginal product of capital, meaning that capital stock is lower than when capital is not taxed, which results decreased growth and welfare in steady state. this paper studies the impact o...