We study, in a two sectors (goods and educational) finite life exogenous growth economy, the impact of distortions to factor accumulation and productivity on cross-country income differences. Human capital follows a Mincerian approach. The model is simulated for 122 economies. Human capital taxation has a relevant impact on incomes, which is amplified by its effect on returns to physical capital. Life expectancy strongly impacts output, as it allows for increasing the present value of wages, inducing further human capital investment. However, some nations are poor because of low productivity, while others because of excess taxation on physical or human capital.