This course deals with topics about the distribution and redistribution of income and wealth. During the lectures, we will discuss key concepts, empirical estimation approaches and measurement issues. We will also review facts and findings in the current academic literature.

Lecture 1: Taxation of top incomes (18.3.2019)

This lecture presents themes on the interplay between income inequality and income taxation, focusing on the top of the income distribution. First, we examine how the elasticity of taxable top incomes, a key parameter in tax analysis, can be decomposed into different tax sensitivities. Then, we offer a historical and international analysis of the top income tax elasticity. Lastly, we study the impact of tax reforms on income inequality at the country level by using a relatively new empirical methodology, synthetic control group estimation.

Lecture 2: How should capital be taxed? (19.3.2019)

This lecture takes a broad stance on capital taxation, drawing on a new study of capital taxation in Sweden (Bastani and Waldenström, 2018). The lecture will review the recent theoretical literature, the extent of capital and its distribution, the current practice of capital taxation in Sweden and other OECD countries, international perspectives, the political feasibility using evidence from a new attitude survey, and, finally, present some lessons for policy from a Swedish perspective.

Lecture 3: Inherited wealth and its taxation (20.3.2019)

This lecture focuses on a specific kind of wealth, inherited wealth, and its taxation. Inheritance taxation is not among the larger capital taxes, but it is motivated by its contribution to the overall tax progressivity and a hampering effect on wealth concentration. We discuss some recent empirical studies of these issues, emphasizing on experiences in the US, France and Sweden.

Lecture 4: Elasticity of preferences for income and capital taxation (21.3.2019)

A recent literature uses experimental approaches to study the elasticity of preferences for redistribution. Building on a vast, older literature, on preferences for redistribution, these new studies add value by aiming to establish causal links between certain determining factors and people’s attitudes to taxation.

The objective of the course is to offer students a solid understanding of the current research, and to stimulate ideas and thoughts on new research projects related to inequality and taxation.

Attendance at the course is generally compulsory.

In the first week of my stay (March) I will present the four lectures listed above. During the second week in May students will present (their) papers.

40%: combination of problem sets/article reviews

20%: an individual home exam.

40%: presentation of students preliminary PhD thesis

Basic knowledge in Economics of Taxation

Medium knowledge in Economics of Taxation

E-mail: daniel.waldenstrom@psemail.eu,

Web: www.uueconomics.se/danielw

Wilfried Altzinger: altzing@wu.ac.at