The article explores the effects of lowering capital tax rates in a model that considers how capital and skilled workers interact. Lowering capital taxes can boost the economy in the long run, but it also increases the wage gap between skilled and unskilled workers. However, if other taxes like labor or consumption taxes have to go up to make up for the cut in capital taxes, the positive effects are lessened. In the long term, consumption inequality increases, and skilled workers benefit more than unskilled workers. The short-term impact depends on how the central bank responds, with potential short-term losses before long-term gains.