Topics in taxation and economic policy

This course explores topics in economics. The first half focusses on various tax policy topics. The second half of the course discusses labor (e.g., minimum wages) and housing market (rent control) questions.
Part 1: Based on recent empirical evidence, we will first discuss some tax policy proposals – such as, e.g., cutting regressive VAT rates, tax simplifications – and their social and economic implications. Here we will put a lot of emphasis on tax incidence – i.e., the analysis who ultimately “pays the price for a tax”. We then take a behavioral economics perspective to discuss the role of salience and taxpayer’s limited attention for the distributive effect of taxes. Moreover, we will discuss international corporate taxation, in particular, the taxation of the digital/tech sector, as well as innovative strategies to fight tax evasion (“tax lotteries”).

Part 2: Moving beyond taxation, we will have a close look on what the evidence tells us about the effects of minimum wages on employment and the wage distribution. We will discuss very recent empirical studies (mainly from the US) and examine broader lessons for the role of firms in modern economies. In particular, we will compare recent studies indicating firms’ increasing power to set wages (leading to a narrative of “Strong Employers and Weak Employees”). These results have strong implications for competition policy and other policy domains. Finally, we will also examine some evidence on the role of rent regulations and price controls, asking which actors on the housing market (if any) ultimately benefit from policy interventions.

Prerequisites: Students are required to have sound knowledge of basic (Micro)Economics (Econ I) and statistics (Stats I). A more advanced knowledge of/background in (Micro)Economics is not a prerequisite, but might be an Advantage.

This course is for 2nd year MIA and MPP students only.