Economics 2600: Public Economics (Taxation)

Lectures: Wednesdays 11am - 1pm, Fridays 11am - 12pm when needed.

Office Hours: Michael Smart, by appointment, 150 St. George St., Room 268




Date Lecture Required readings Additional Material/Student Presentations

Course Outline

Practice problems #1 (Skip the questions on compensating variation, and use the definition of ev given in class in the first question.)
Excess burden *Auerbach and Hines, 2002, "Taxation and economic efficiency,"Handbook of Public Economics, vol. 3, pp. 1347-1421. It is strongly recommended that you read papers marked * before class.
Elasticity of taxable income *M. Feldstein, 1995, "The effects of tax rates on taxable income: A panel study of the 1986 Tax Reform Act," Journal of Political Economy 103, 551-572.

Saez, Slemrod, and Giertz, 2012, "The Elasticity of Taxable Income with Respect to Marginal Tax Rates: A Critical Review," Journal of Economic Literature.
Optimal commodity taxation *Auerbach and Hines, Handbook, secs. 3 and 5.2

*West and Williams, 2007, "Optimal taxation and cross-price effects on labor supply: Estimates of the optimal gas tax," Journal of Public Economics, Volume 91, Issues 3-4, April 2007, Pages 593-617
Practice problems #2
Income taxation

*Auerbach and Hines, sec. 3

Saez and Veall, 2005, "The Evolution of High Incomes in Northern America: Lessons from Canadian Evidence," AER.
Income taxation (continued) *Diamond, P., 1998, "Optimal income taxation: An example with a U-shaped pattern of optimal marginal tax rates," American Economic Review 88, 83-95 Practice problems #3

Peter Diamond and Emmanuel Saez, 2011, "The case for a progressive tax: From basic research to policy recommendations," Journal of Economic Perspectives 25 (4), 165-190
Income support policies

*Emmanuel Saez, 2010, "Do taxpayers bunch at kink points?" AEJ: EP 2, 180-212.

E. Saez, 2002, Optimal income transfer programs: intensive versus extensive labor supply responses, QJE 117, 1039-1063.
Taxation of capital income *Bernheim, B. D., 2002, "Taxation and saving," Handbook of public economics, vol. 3.

Chari, VV and Patrick Kehoe, 1999, "Optimal Fiscal and Monetary Policy," in Handbook of Macroeconomics, Volume 1C, (Also Minneapolis Fed Staff Report 251, 1998.). Read sec. 2.

Straub and Werning, 2014, "Positive long run capital taxation: Chamley-Judd revisited," NBER WP 20441.
Reading week (no class)
Corporate taxation *Auerbach, Alan, 2006, ``Who bears the corporate tax? A review of what we know,'' Tax Policy and the Economy 20, 1-40.
Dividend taxation *Auerbach, Alan J., 2002, ``Taxation and Corporate Financial Policy,'' in Auerbach, Alan J. and Martin Feldstein (eds.) Handbook of Public Economics, Vol. 3, pp. 1252-1292.

International taxation

*Gordon and Hines, 2002 , "International taxation," Handbook of Public Economics, vol. 3.

*Hines, J. R., 1996 , American Economic Review 86(5), 1076-1094.

Michael Keen and Kai A. Konrad, 2013, "The Theory of International Tax Competition and Coordination," Handbook of Public Economics.
Fiscal Federalism *Boadway, R. and J.-F. Tremblay, 2012, ``A reassessment of the Tiebout model,'' Journal of Public Economics 96, 1063-1078.
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