ECON 514
Tax Policy in Global Perspective Spring 2020
Division II Quantative/Formal Reasoning
Cross-listed ECON 514 / ECON 389
This is not the current course catalog

Class Details

Taxes are half of what government does. So if you are interested in what government policy can do to promote efficiency, equity, and economic development, you should be interested in tax policy. Governments must raise tax revenue to finance critical public goods, address other market failures and distributional issues, and to avoid problems with debt and inflation. Taxes typically take up anywhere from ten to fifty percent of a country’s income, they profoundly affect the incentives to undertake all varieties of economic activity, and the government expenditures that they finance have potentially large consequences for human welfare. So the stakes involved in improving tax policy are quite large. This class provides an in-depth exploration of tax policy, from a global and comparative perspective. Because most students in this class will be CDE fellows, we will emphasize tax policy issues, examples, and evidence that are most pertinent to developing countries, but we will also learn something about tax systems in the U.S. and other industrialized nations. Topics addressed in this class include: how basic economic principles can be applied to help one think about the efficiency and equity consequences of tax policies; how personal income taxes, corporate income taxes, and value-added taxes are designed and administered and how they influence the economy; ideas for fundamental reforms of these taxes; theory and evidence in the debate over progressive taxes versus “flat” taxes; how various elements of tax design affect incentives to save and invest; how market failures and administrative problems may influence the optimality of different tax policies; the implications of global capital flows and corporate tax avoidance for the design of tax policy; tax holidays and other special tax incentives for investment; empirical evidence on the influence of taxes on economic growth, foreign direct investment, labor supply, and tax evasion; tax policy towards natural resources such as minerals and oil; case studies of efforts to reform tax administration and reduce tax evasion and corruption; taxes on land and property; taxes on imports and exports; presumptive taxation; and the informal economy and its implications for tax policy.
The Class: Format: seminar
Limit: 19
Expected: 15-19
Class#: 3169
Grading: yes pass/fail option, yes fifth course option
Requirements/Evaluation: midterm exam, 4 problem sets, two 8-page essays
Prerequisites: one public economics course or microeconomics course (ECON 504 or ECON 110), and one empirical methods course (POEC 253 or ECON 255, 502, or 503); students who have previously taken ECON 351 will not be enrolled
Enrollment Preferences: CDE students, but undergraduates with the prerequisites are welcome
Distributions: Division II Quantative/Formal Reasoning
Notes: This course is cross-listed and the prefixes carry the following divisional credit:
ECON 514 Division II ECON 389 Division II

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