Economics of Taxation

Exam Review (retake)

Thursday, 6th December, 2018
11:00
F229 (Prof. Schwerdt's office)

Lecture + Tutorial, 3+1 hours | 8 ECTS | MSc | G. Schwerdt | ZEuS | ILIAS

Tuesday, 8:15 - 9:45,  Room F429
Wednesday, 17:00 - 18:30, Room D435

Course Description

The class offers an introduction to the microeconomic theory of taxation. We deduce the fundamental results of the theory of optimal commodity taxation (Ramsey) and of optimal income taxation (Mirrlees) and discuss their implications for tax policy.
We then drop the assumption that taxes are paid honestly and analyze motives for tax evasion and its consequences.

In a next step we extend the analysis of optimal taxation by studying taxes to finance the provision of public goods, to internalize externalities (Pigou) and to cope with market imperfections.
Finally, we discuss limits to redistribution and show how tax competition can limit the success of delegating tax-setting powers to independent jurisdictions.


75% of the class is devoted to teaching, 25% is devoted to tutorials and discussion of exercises.
Prerequisites:  Public Finance 1, Microeconomics 1


Course Outline

  1. Introduction
  2. Welfare Economics and Taxation
  3. Commodity Taxation 
  4. Income Taxation
  5. Tax evasion
  6. Tax Financing of Public Goods
  7. Taxes and Internalization of External Effects
  8. Taxes and Market Imperfections
  9. Limits to Redistribution
  10. Tax Competition


References
Main Textbook(s)
Hindriks, J. and Myles, G. D. (2013), Intermediate Public Economics, 2. ed., MIT-Press, Cambridge, MA.
Myles, Gareth (1995), Public Economics, Cambridge UK.
Further Reading
Kaplow, L. (2008): The Theory of Taxation and Public Economics. Princeton University Press.
Keuschnigg, C. (2005): Öffentliche Finanzen: Einnahmenpolitik, Mohr Siebeck, Tübingen.
Salanié, B. (2011): The Economics of Taxation, 2. ed, MIT Press Cambridge.
Tresch, R. (2008), Public Sector Economics, New York: Palgrave McMillan.


All documents that we will provide related to this course will be provided via the e-learning-platform ILIAS. You can sign up to the corresponding ILIAS group using the password provided in the lecture.