JAMES HAUSMAN TAX LAW & POLICY WORKSHOP
presents
Matthew Weinzierl
Harvard Business School
The Promise of Positive Optimal Taxation
Wednesday, September 25, 2013
12:30 - 2:00
Solarium (room FA2) - Falconer Hall
84 Queen' s Park
At the heart of modern optimal tax research is the assumption that the objective of taxation is Utilitarian. I present new survey evidence that most people disagree with this assumption, preferring tax policies based at least in part on a classic alternative objective: the principle of Equal Sacrifice. I generalize the standard model to accommodate this preference for a mixed objective, proposing a method by which to make disparate criteria commensurable while respecting Pareto efficiency. Then, I show that optimal policy in this generalized model, calibrated to the survey evidence and U.S. microdata, quantitatively matches several features of existing tax policy that are incompatible in the conventional model but widely endorsed in reality, including the coexistence of substantial redistribution and limited tagging. Together, these findings demonstrate the potential of a positive theory of optimal taxation.
Matt Weinzierl completed his PhD in economics at Harvard University in 2008 and is an Associate Professor in the Business, Government, and the International Economy Unit at Harvard Business School. Professor Weinzierl’s research focuses on the optimal design of tax policy. In particular, he has written on the potential value of age-dependent taxation, the dynamic feedback effects of tax changes, the use of fiscal policy to counteract recessions, and the impact of differences in beliefs and tastes across individuals on optimal tax design. His research has been published in Review of Economic Studies, Journal of Public Economics, American Economic Journals: Economic Policy, Brookings Papers on Economic Activity, Journal of Economic Perspectives, and has been discussed in the Economist, the New York Times, and the Wall Street Journal. In 2008, he was selected to participate in the Review of Economic Studies tour. He is a Faculty Research Fellow at the National Bureau of Economic Research
For more workshop information, please contact Nadia Gulezko at n.gulezko@utoronto.ca
