Microeconomics of taxation: efficiency, incidence, effect on distribution of income, personal and corporate income taxes, sales and consumption taxes, taxation of property and estates. Prerequisite: minimum grade of 2.0 in ECON 300.
Types of taxes. How taxes affect markets. The incidence of taxes. The revenue and deadweight loss burdens of taxes. Tax fairness. Tax policy. The structure of income taxation. Tax expenditures. How income taxation affects labor supply and saving. Business income taxation. State and Local taxes.
Student learning goals
Develop an understanding of how taxes affect the economic decisions made by households and businesses, and more generally how taxes affect the allocation of economic resources and the distribution of income in an economy as a whole.
Assemble a working knowledge of the main facts about the United States tax system, and an understanding of how the main taxes such as the Federal personal and corporate income taxes and the State and Local Retail Sales tax are structured.
Be able to evaluate tax policies and reforms or potential tax policies according to the normative criteria of economic efficiency, distributional equity and administrative feasibility.
General method of instruction
Lectures, problems, class discussion.
Review Economics 300, especially consumer theory, theory of the firm, and supply and demand equilibrium.
Class assignments and grading
Five Assignments. Problems illustrating class topics.
Two class tests equally weighted. Assignment grade used to improve grade at discretion of instructor.