Economics of Taxation 2400-M2ESPEOa
1. The definition of taxes, types of taxes and tax rules, types of progressivity of taxes.
2. Efficiency of taxation (changes in the behaviour of taxpayers, administrative costs and adjustment costs), taxation of externalities, excess burden of taxation.
3. Optimal taxation theories (optimal taxation of goods, optimal taxation of incomes). Political economics and the efficiency of taxation.
4. Effects of taxes: taxes supporting investments and development, taxes and labour supply, taxes and risk taking, taxation and the financial structure of firms.
5. Tax avoidance and tax evasion. Why do people avoid paying taxes and what are the results? Tax abolition.
6. Tax administration and its problems. Control of taxpayers from the point of view of agency theory and game theory. Corruption in the tax administration.
7. Horizontal and vertical equity. Distributional effects of taxation. Arguments for progressive taxation. Popular reaction to certain types of taxes. Taxation beneficial for families.
8. Direct taxes: characteristics and construction. Different concepts of direct (income) taxation. Personal income tax and corporate income tax.
9. Indirect taxation (value added tax, excise). Why do we need value added tax, and what are the alternatives? What is the excise for?
10. International aspects of taxation: double taxation avoidance, international tax competition, tax heavens.
11. Taxation of wealth (inheritance tax, agricultural tax, etc.) and other local taxes. Importance of local taxation in the revenues of local governments.
Type of course
Learning outcomes
a) Knowledge
1. Student understands the role of taxes in the economy and knows how they can impact economic processes and the behavior of individuals. S1A_W01, S1A_W02, S1A_W03, S1A_W08
2. Student knows the basic models of taxation, in particular the optimal taxation, and understands their evolution and factors influencing it. S1A_W01, S1A_W02, S1A_W03, S1A_W08 , S1A_W09
3. Student knows the tools used in taxation analysis and understands the consequences of their usage. S1A_W01, S1A_W02, S1A_W03, S1A_W06
4. Student has the knowledge about tax systems used around the world, understands current tax debates and the direction of tax reforms. S1A_W01, S1A_W02, S1A_W03, S1A_W07, S1A_W08 , S1A_W09
b) Abilities
1. Student is able to analyze the effect of tax changes on the economy, compare the impact of the alternative tax reforms. S1A_U01, S1A_U02, S1A_U03, S1A_U08
2. Student is able to analyze the tax systems, pointing out efficient and inefficient solutions, and suggesting possible changes. S1A_U01, S1A_U02, S1A_U03, S1A_U07, S1A_U08
3. Student is able to explain the problems of tax avoidance, tax evasion and the role of tax administration. S1A_U01, S1A_U02, S1A_U03, S1A_U08
c) Social abilities
1. Student is aware of the differences between theory and practice, of the need to adjust theoretical solutions to the existing conditions. Student is ready to look for new knowledge about the subject. S1A_K03, S1A_K04, S1A_K06
2. Student understands problems with taxation, which she/he can observe and is able to participate in the debate about tax reforms. S1A_K03, S1A_K04, S1A_K05
Assessment criteria
The evaluation of learning outcomes achieved by a student is done through a written exam.
Bibliography
- Aaron J., J. Pechman (1992), How taxes affect economic behaviour, The Brooking Institution, Washington
- Auerbach A.J., M.S. Feldstein (eds.), Handbook of Public Economics, Elsevier, North-Holland
- Auerbach A.J., J.R. Hines Jr. (2001), Taxation and Economic Efficiency, NBER Working Paper 8181
- Hildreth W., J. Richardson (1999), Handbook on taxation, Marcel Dekker, New York
- James S., C. Nobes (1998), The Economics of Taxation, Prentice Hall Europe
- Salanié B. (2003), The Econimics of Taxation, MIT Press, Cambridge, USA
- Slemrod J. (1984), A General Equilibrium Model of Taxation That Uses Micro-Unit Data: With an Application to the Impact of Instituting a Flat-Rate Income Tax, NBER Working Paper 1461
- Stiglitz J.E. (2000), Economics of the Public Sector, W. W. Norton & Company
These readings do not cover the whole content of the course. We will refer to numerous papers in the economic journals and information on tax systems in different countries.
Additional information
Additional information (registration calendar, class conductors, localization and schedules of classes), might be available in the USOSweb system: