ApEc 8341 APPLIED PUBLIC FINANCE Fall 2013

Transcription

1 ApEc 8341 APPLIED PUBLIC FINANCE Fall 2013 Instructors: Laura Kalambokidis Tom Stinson Office: 217f Ruttan Hall 337f Ruttan Hall Phone: Office Hours: M,W 10:00-11:30 Class Meetings: M, W 8:45-10:00 Prerequisites: Econ or Course Description: In this course students will study current economic research on government tax and expenditure policy and will learn to apply the tools of applied economics to public finance issues. The course will cover topics in both tax policy and expenditure policy. Tax topics will include the principles of tax policy, taxation and household decisions (including labor supply and saving), taxation and the firm (including the cost of capital), and fundamental tax reform. Grading: Grades for the entire course will be based 50% on the grade for the half of the course taught by Prof. Kalambokidis and 50% on the grade from the half taught by Prof. Stinson. Grades for the Kalambokidis half of the semester will be computed as follows: 40% each on two take-home quizzes (due September 30 and November 6) and 20% on a presentation to the class (details below). Presentation: For many areas of public finance, predictions based on theory are ambiguous. (For example, will lowering taxes on interest income lead to an increase or decrease in savings? It depends.) Resolution of these questions comes only from empirical research, including econometric studies, simulations, and experiments. Each student will make a presentation to the class that summarizes recent empirical research on any of the topics listed in the syllabus. Sources can include assigned readings, including the texts, and any other articles you find. Presentations will be approximately 30 minutes, which is not adequate for a comprehensive review of all empirical work on a topic. Therefore, we are seeking a summary of the state of knowledge, including the evidence that you find most interesting.

2 Early in the semester, students will choose their topics, and the presentations will be scheduled to coincide with the topics places in the syllabus. Readings: Readings will be assigned from professional journals and one required text: Slemrod, Joel, and Jon Bakija. Taxing Ourselves, fourth edition. Cambridge, MA: MIT Press, Several readings are from Tax Policy in the Real World, edited by Joel Slemrod. This is on reserve in Waite Library. An optional text, also on reserve in Waite Library, is: Hindricks, Jean, and Gareth D. Myles. Intermediate Public Economics. Cambridge, MA: MIT Press

3 Outline for Kalambokidis half of course: September 4 and 9: Taxation and Economic Efficiency Auerbach, A., and J. Hines. "Taxation and Economic Efficiency." In Handbook of Public Economics. Vol. 3. Edited by A. Auerbach and M. Feldstein. Amsterdam: Elsevier, 2002, pp Also available on the NBER website (pp. 1-30): Diamond, Peter, and Emmanuel Saez (2011), The Case for a Progressive Tax: From Basic Research to Policy Recommendations, Journal of Economic Perspectives 25:4 (Fall 2011): Available here. Hindricks and Myles, Chapter 14 Slemrod and Bakija, Chapters 1-2. Slemrod and Bakija, pp Slemrod, J. "Optimal Taxation and Optimal Tax Systems." Journal of Economic Perspectives 4 (Winter 1990): Available here and from JSTOR. September 11, 16, and 18: Tax Simplicity, Evasion and Enforcement Allingham, Michael G. and Agnar Sandmo (1972), Income tax evasion: A theoretical analysis, Journal of Public Economics 1, Available here. Alm, J., and C. Blackwell. McKee., M.(2004). Audit selection and firm compliance with a broad based sales tax. National Tax Journal 57 (2 Part 1) Andreoni, James, Brian Erard and Jonathan Feinstein (1998), Tax compliance, Journal of Economic Literature 36, Available here. Blumenthal, Marsha, Laura Kalambokidis, and Alex Turk. = Subsidizing Charitable Contributions with a Match Instead of a Deduction: What Happens to Donations and Compliance? National Tax Journal 65, 1 (March 2012): Hindricks and Myles, Ch. 16. Raskolnikov, Alex. Revealing Choices: Using Taxpayer Choice to Target Tax Enforcement. Columbia Law Review (2009) 109: Available here. Slemrod and Bakija, pp

4 Slemrod, Joel, and Shlomo Yitzhaki. Tax Avoidance, Evasion, and Administration. In Handbook of Public Economics. Vol. 3. Edited by A. Auerbach and M. Feldstein. Amsterdam: Elsevier, 2002, pp Also available on the NBER website: September 23 and 25: Taxation and Labor Supply Heckman, J. What Has Been Learned About Labor Supply in the United States in the Past Twenty Years? American Economic Review 83, 2 (May 1993): Available here and from JSTOR. Hindricks and Myles, Ch. 15. Slemrod and Bakija, pp and pp September 30: take-home quiz #1 due October 14 and 16: Taxation and Saving Bernheim, D. "Taxation and Saving." In Handbook of Public Economics. Vol. 3. Edited by A. Auerbach and M. Feldstein. Amsterdam: Elsevier, 2002, pp Available at NBER website: Engen, E., W. Gale, and J. Scholz. "Do Saving Incentives Work?" Brookings Papers on Economic Activity 1994: 2, Available here and from JSTOR. Slemrod and Bakija, pp , pp October 21 and 23: Taxing Corporations Auerbach, A. "Taxation, Corporate Financial Policy, and the Cost of Capital." Journal of Economic Literature 21 (1983): Available here and from JSTOR. Gravelle, Jane G. The Corporate Income Tax: Economic Issues and Policy Options in Slemrod, J., ed. Tax Policy in the Real World. Cambridge, UK: Cambridge University Press (1995) Hall, Robert E., and Dale W. Jorgenson. Tax Policy and Investment Behavior. American Economics Review 57, 3 (June 1967): Available here. Miller, M. Debt and Taxes. Journal of Finance 32 (1977): Available here and from JSTOR. Slemrod and Bakija, pp

5 Sorenson, Peter Birch. Changing Views of the Corporate Income Tax in Slemrod, J., ed. Tax Policy in the Real World. Cambridge, UK: Cambridge University Press (1995) October 28, 30 and November 4: Fundamental tax reform Auerbach, A., and J. Slemrod. "The Economic Effects of the Tax Reform Act of 1986." Journal of Economic Literature 35 (June 1997): Available here. Gordon, R, L. Kalambokidis, and J. Slemrod. Do We Now Collect Any Revenue from Taxing Capital Income? Journal of Public Economics 88, 5 (April 2004): Available here. Gordon, R., L. Kalambokidis, and J. Slemrod. A New Summary Measure of the Effective Tax Rate on Investment, in Measuring the Tax Burden on Capital and Labor, ed. P. Sorenson, Cambridge, MA: MIT Press (July 2004): NBER Working Paper version here. Slemrod and Bakija, Chapters 6-8. November 6: Take-home quiz#2 due