Taxation and Policy Analysis

FOR11 Taxation and Policy Analysis

Spring 2019

  • Topics

    The course will use economic theory to investigate how taxes affect the decisions of investors, firms, employees, consumers and voters. We also investigate how taxation may distort or enhance economic efficiency, and we study how the burden of taxation is shared between producers and consumers in the economy. The topics covered in this course will be closely related to pressing policy questions that are discussed by politicians, special-interest groups and policy consultants. For example, many governments have implemented tax reductions for corporate income from intangible assets such as patents. The rationale is that lower tax rates on the output of research activity will increase corporate investment in R&D and generate positive externalities within the economy. Is this a useful policy to foster innovative activity? How might firms respond to such incentives given that intangible assets may be shifted across borders? Under what circumstances would such policies be welfare-improving in small open economies such as Norway?

  • Learning outcome

    Upon successful completion of the course the student

    Knowledge

    • Understands how the government can use taxation to redistribute resources from the rich to the poor
    • Understands how governments compete for mobile capital using fiscal policy instruments
    • Knows how the international tax system works and can assess how tax policy changes affect firms that are part of multinational enterprises (MNEs)

    Skills

    • Is able to analyze how taxes affect economic decisions made by firms, workers and consumers
    • Is able to analyze how different forms of taxation affect the trade-off between economic efficiency and equality

    General Competence

    • Is able to weight the cost and benefits of changes in tax policy
    • Understands how changes in tax policy and policy experiments can be used to quantify the economic effects of taxation
    • Is able to apply economic theory to real-world issues faced by governments, consumers and businesses

  • Teaching

    Plenary Lectures and Exercises.

  • Recommended prerequisites

    SAM4 Internasjonal handel og velferdsteori.

    In this course the students should have basic insight in microeconomics, and in particular understand economic efficiency. In the bachelor program at NHH, economic efficiency is covered in SAM4.

  • Required prerequisites

    Students should have passed a first-year course in each of the following subjects: Mathematics, Statistics and Microeconomics.

  • Credit reduction due to overlap

    100 % credit reduction towards VOA048.

  • Assessment

    The final grade is based on a written school exam (3 hours), which counts 60 %, and one term paper with re-submission after feedback (max. 6 pages, in groups of 2-4 students), which counts 40 %. Answers must be written in English. All elements have to be taken in the same semester.

  • Grading Scale

    Grading scale A - F.

  • Computer tools

    None

  • Literature

    Jonathan Gruber, Public Finance and Public Policy, 5th edition, Worth Publishers.

    Recommended readings: To be decided

Overview

ECTS Credits
7.5
Teaching language
English
Semester

Spring. Offered spring 2019.

Course responsible

Assistant Professor Maximilian Todtenhaupt, Department of Business and Management Science.