B2040 - TAX POLICY

Learning outcomes

At the end of the class, the student has knowledge about the economic analysis of how taxes affect households and firms on the ground of efficiency and redistribution and about the economic debate around taxes both in domestic and international context. Moreover, he/she knows the main institutional features of the tax system in Italy and in the European countries as for the taxation of individual income, corporate income, capital income, wealth and consumption.

Course contents

Introduction to tax analysis

• Basic definitions: tax base, tax rate, tax allowances, tax incidence, tax progressivity, different types of taxes

Prerequisites

• Duality in consumption
• Individual well-being measurement
• Excess burden measurement

Theory of optimal taxation

• Optimal taxation on goods
• The Ramsey model
• Uniform taxation vs. differential taxation
• Optimal mix of direct and indirect taxes

• Optimal income tax
• Optimal linear income tax
• Optimal nonlinear income tax

• Optimal taxation and public provision of private goods

Economics of tax evasion

• Tax evasion as a portfolio choice: the taxpayer's perspective
• Optimal assessment policies: the government's perspective

The political economy approach to tax theory

• Probabilistic voting models

Issues in international taxation

• Principles of international corporate tax (multinational enterprises)
  
• Fiscal competition, race to the bottom

Readings/Bibliography

Jha R. [1998], Modern Public Economics, Routledge.

Hindriks, J. and Myles, G.D. [2006], Intermediate Public Economics, The MIT Press.

Additional materials made available during the course.

Teaching methods

Lectures organized in three-hour blocks.

Assessment methods

The learning assessment consists of a written test that generally includes 3 open questions. The available time to the students for the written test is 90 minutes. No oral test is provided for. During the written test, the use of support material such as textbooks, notes, computer media is not permitted. The maximum score achievable is 30/30 with honors. The test is considered passed with a minimum score of 18/30.

Marks rating:

<18 insufficient

18-23 sufficient

24-27 good

28-30 excellent

30 with honors excellent

Teaching tools

Teaching materials will be made available on the course web page on Virtuale platform.

Office hours

See the website of Alberto Zanardi