Tax Policy

About

The course gives an overview on the basic models used to analyze the efficiency implications and optimal design of tax policy. The course puts emphasis on linking formal analysis to empirical analysis and to discuss implications of theoretical and empirical findings for real world tax policy.

Target group

Master students

Course aim

After completing the course, the student should be able to:

Knowledge:

•Understand the concept of tax incidence including key theoretical predictions as well as common strategies for empirical measurement.

•Understand the concept of economic efficiency including theoretical predictions as well as common strategies for empirical measurement.

•Be able to account for the concept of tax salience as well as its implications for tax incidence and economic efficiency

•Know key facts about commodity taxation in the real world

•Understand the economic intuition behind theories of optimal commodity taxation as well as their implications for practical policy making

•Be able to account for the concept of self-control problems (including how it can be modelled in economic theory) and its implications for optimal commodity taxation

•Know key facts about income taxation in practice

•Understand the economic intuition behind theories of optimal income taxation as well as their implications for practical policy making

•Know key facts about firm taxation in practice

•Understand the economic intuition behind theories of firm taxation as well as their implications for practical policy making

•Understand the concept of internationaltax competition including key empirical facts and theoretical predictions

•Know key institutional facts about offshore tax evasion

•Be able to account for theories of tax evasion and important empirical findings

Skills:

•Derive predictions about tax incidence in simple theoretical models of partial equilibrium and interpret them in a straightforward language

•Derive formulas that capture the measurement of of economic efficiency in a simple theoretical framework and interpret them in a straightforward language

•Theoretically analyze tax incidence and economic efficiency under the assumption that tax salience is limited

•Derive expressions that characterize optimal commodity taxation in the canonical Ramsey model and interpret them in a straightforward language

•Derive expressions that characterize optimal commodity taxation in models assuming that some agents have self-control problems and interpret them in a straightforward language

•Derive expressions that characterize optimal income taxation at the top and at the bottom of the income distribution as well as in the presence of exogenous tags and interpret them in a straightforward language

•Derive expressions that characterize firm responses to dividend taxation under various assumptions about the firms and interpret them in a straightforward language

•Derive predictions about corporate taxation under internationaltax competition and interpret them in a straightforward language

Competencies:

•Discuss strengths and weaknesses of theoretical models of public finance ina straightforeward language

•Discuss strengths and weaknesses of empirical strategies employed to measure key behavioral parameters in public finance

•Discuss concrete policy issues using terms and concepts from the theory of taxation ina straightforeward language

Fee info