SAVE THE DATE

The 67th Congress of the International Institute of Public Finance (IIPF) will be hosted by the Office of Tax Policy Research, August 8 -11, 2011 in Ann Arbor, Michigan, USA.  IIPF has almost 800 members from 50 countries and is the pre-eminent academic institution for the study and research of economic public policy topics.  The theme of the Congress is “Rethinking the Role of the State: Responses to Recent Challenges.”

More information will be available on this Web site and the IIPF’s  (http://www.iipf.org/) in the near future.

NATIONAL TAX ASSOCIATION ANNUAL MEETING

The Office of Tax Policy Research was well represented at this year's annual meeting of the National Tax Association. Along with OTPR Director, Joel Slemrod; Research Director, James R. Hines Jr.; Research Associates David Albouy and Dan Silverman; nine of our graduate students attended. Our annual dinner for people with an OTPR connection was great fun, attended by 17 of us even though it met at the same time as the NTA Executive Board, which kept several OTPR alumni from joining us. 
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TAX REFORM FOR GROWN-UPS

On March 24 the Obama administration announced the formation of a high-level task force to review the U.S. tax system and make policy recommendations by December 4, 2009. Former Federal Reserve Chairman Paul Volcker will head the panel, and senior economic adviser Austan Goolsbee will serve as staff director.

Is it déjà vu all over again? Just four years ago President Bush formed a tax review panel, The President's Advisory Panel on Federal Tax Reform, whose report was delivered on November 1, 2005. To see what that panel recommended, what became of their recommendations, and what lessons the episode provides for Obama's task force, read the article by OTPR Director Joel Slemrod and Katherine Blauvelt, "Tax Reform for Grown-Ups" that was published in the March 2006 issue of the Milken Institute Review.

While policy makers struggle with identifying and enacting the appropriate short-term policy response to the recent financial crisis and economic downturn, both academics and policy makers are examining the causes of the crisis and what lessons this might bring to bear on longer-term policy. With near unanimity attention to both the causes and appropriate long-term policy response has focused on the financial sector, although fiscal policy, including tax policy, has certainly figured prominently in countries’ short-term policy response to the economic contraction. In recent months, though, officials from two international organizations, the IMF and the OECD, have produced reports addressing what aspects of the tax system may have helped cause or exacerbate the crisis, and whether tax policy needs to be re-evaluated in light of the recent events. In this article OTPR Director Joel Slemrod offers some speculations about the lessons for tax policy, and the analysis of tax policy, from the Great Recession. What did we get wrong? What did we underestimate the importance of? What do we need to think more about?

TAXING THE RICH

How much and how the rich should be taxed often plays a critical role in tax policy debates.  It comes up with regard to incremental tax proposals, which are always scrutinized for how much benefit goes to high-income individuals. It also figures prominently in the debate about fundamental tax reform -- whether to abandon the income tax in favor of a value-added tax, retail sales tax, or flat tax; while it is generally agreed upon that any of these alternatives would reduce the tax burden on the rich, there is much less agreement about whether the economic benefits would be significant, and on how critical the reduction of tax progressivity is to the economic benefits these reforms promise. In his introductory chapter of Does Atlas Shrug: The Economic Consequences of Taxing the Rich, OTPR Director Joel Slemrod discusses the issue of income tax rates on affluent households.