This course offers a comprehensive overview of the economics of taxation. The focus will primarily be on theoretical considerations. The course will start with the background for the analysis of taxation. It will then introduce the canonical model of optimal labor income taxation. The taxation of commodities will also be analyzed in details. Dynamic issues in optimal taxation will be at the heart of the last three lectures, which will deal with the taxation of capital and with intergenerational taxation.
By the end of the course, students should have a good knowledge of the main theoretical results in optimal taxation and of their corresponding intuitions. They should be able to apply this knowledge to a broad range of policy issues. Finally, they should understand the structure of the academic literature on the topic, which should allow them to locate the research frontier on some important issues in public finance.
Part 1: Pierre Boyer
– Lecture 1: Tax incidence
– Lecture 2: Distortions and welfare losses
– Lecture 3: Interpersonal comparisons of utilities (social welfare function)
– Lecture 4-6: Optimal labor income taxation (linear, non-linear)
Part 2: Jean-Baptiste Michau
– Lecture 7: Optimal labor income taxation: The extensive margin
– Lecture 8: Commodity taxation
– Lecture 9: Mixed taxation (commodity & labor income)
– Lecture 10: The taxation of capital
– Lecture 11: Insurance against wage fluctuations
– Lecture 12: Intergenerational taxation
– Fundenberg, D. and Tirole, J. (1991), Game Theory, Cambridge, MA: MIT Press. Chapter 7
– Kocherlakota, N.R. (2010), The New Dynamic Public Finance, Princeton, NJ: Princeton University Press.
– Mas-Colell, A., Whinston, M.D., Green, J.R. (1995), Microeconomic Theory, Oxford University Press. Chapter 23
– Myles, G. (1995), Public Economics, Cambridge University Press.
– Salanie, B. (2011), The Economics of Taxation, 2nd Edition, Cambridge, MA: MIT Press.