Summary

The Policy Elasticity
Author(s):
Nathaniel Hendren, Harvard University and NBER
Summary:

This paper illustrates how one can use causal effects of a policy change to measure its welfare
impact without decomposing them into income and substitution effects. Often, a single causal
effect suffices: the impact on government revenue. Because these responses vary with the policy
in question, I term them policy elasticities, to distinguish them from Hicksian and Marshallian
elasticities. The model also formally justifies a simple benefit-cost ratio for non-budget neutral
policies. Using existing causal estimates, I apply the framework to five policy changes: top income
tax rate, EITC generosity, food stamps, job training, and housing vouchers.

In addition to the conference paper, the research was distributed as NBER Working Paper w19177, which may be a more recent version.

Fiscal Stimulus in Federal Economies: What Role for States?
Author(s):
Robert Inman, University of Pennsylvania and NBER
Gerald Carlino, Federal Reserve Bank of Philadelphia
The Distributional Effects of U.S. Clean Energy Tax Credits
Author(s):
Severin Borenstein, University of California, Berkeley and NBER
Lucas Davis, University of California, Berkeley and NBER

In addition to the conference paper, the research was distributed as NBER Working Paper w21437, which may be a more recent version.

Partnerships in the United States: Who Owns Them and How Much Tax Do They Pay?
Author(s):
Michael Cooper, Department of the Treasury
John McClelland, Congressional Budget Office
James Pearce, Congressional Budget Office
Richard Prisinzano, University of Pennsylvania
Joseph Sullivan, Harvard University
Danny Yagan, University of California, Berkeley and NBER
Owen Zidar, Princeton University and NBER
Eric Zwick, University of Chicago and NBER
Downloads:
An Experimental Evaluation of Noti cation
Strategies to Increase Property Tax Compliance:
Free-Riding in the City of Brotherly Love
Author(s):
Holger Sieg, University of Pennsylvania and NBER
Summary:

This study evaluates a set of notification strategies intended to increase property tax collection. To test these strategies, Chirico, Inman, Loeffler, MacDonald, and Sieg develop a field experiment in collaboration with the Philadelphia Department of Revenue. The resulting notification strategies draw on core rationales for tax compliance: deterrence, the need to finance the provision of public goods and services, as well as the appeal to civic duty. The authors' empirical findings provide evidence that both a moral appeal to finance public goods and services and an appeal to civic duty modestly improve tax compliance, while deterrence notifications are no different from standard notifications.

Downloads:
Business in the United States:
Who Owns it and How Much Tax They Pay
Author(s):
Michael Cooper, Department of the Treasury
John McClelland, Congressional Budget Office
James Pearce, Congressional Budget Office
Richard Prisinzano, University of Pennsylvania
Joseph Sullivan, Harvard University
Danny Yagan, University of California, Berkeley and NBER
Eric Zwick, University of Chicago and NBER
Owen Zidar, Princeton University and NBER
Summary:

"Pass-through" businesses like partnerships and S-corporations now generate over half of U.S. business income and account for over half of the post-1980 rise in the top 1% income share. Cooper, McClelland, Pearce, Prisinzano, Sullivan, Yagan, Zidar, and Zwick use administrative tax data from 2011 to identify pass-through business owners and estimate how much tax they pay. The researchers present three findings. (1) Relative to traditional business income, pass-through business income is substantially more concentrated among high-earners. (2) The average federal income tax rate on U.S. pass-through business income is 19% — much lower than the average rate on traditional corporations. (3) Thirty percent of the income earned by partnerships — the largest pass-through form — cannot be unambiguously traced from the partnership that generated the income to an identifiable, ultimate owner. If pass-through activity had remained at 1980's low level, strong but straightforward assumptions imply that the 2011 average U.S. tax rate on total U.S. business income would have been 28% rather than 24%, and tax revenue would have been at least $100 billion higher.

Downloads:
Redistribution through Minimum Wage Regulation:
An Analysis of Program Linkages and Budgetary Spillovers
Author(s):
Jeffrey Clemens, University of California, San Diego and NBER
Summary:

Program linkages and budgetary spillovers can significantly complicate efforts to project a policy change's effects. Clemens illustrates this point in the context of recent increases in the federal minimum wage. Previous analysis finds that these particular minimum wage increases had significant effects on employment. Employment declines were sufficiently large that the average earnings of targeted individuals declined. Payroll tax revenues thus also fell. Clemens finds that transfers to affected individuals through programs including unemployment insurance, food stamp benefits, and cash welfare assistance changed little. These programs thus offset relatively little of the earnings declines experienced by individuals who lost employment. The author discusses how this broad range of spillovers matters for assessing the relevant minimum wage change's welfare implications.

Downloads:
An Experimental Evaluation of Strategies to Increase Property Tax Compliance: Free-riding in the City of Brotherly Love
Author(s):
Michael Chirico, University of Pennsylvania
Robert Inman, University of Pennsylvania and NBER
Charles Loeffler, University of Pennsylvania
John MacDonald, University of Pennsylvania
Holger Sieg, University of Pennsylvania and NBER

Participants

Below is a list of conference attendees.
Andrew Austin, Congressional Research Service
Mary Barth, Office of Management and Budget
Nathan Born
David Brazell, Department of the Treasury
Kimberley Burham, Investment Company Institute
James Cilke, Joint Committee on Taxation
Laura Davison, Bloomberg News
Jane Dokko, Federal Reserve Bank of Chicago
Amy Elliott, Tax Analysts
Austin Frerick, U.S. Department of the Treasury
Martha Harris, Internal Revenue Service
Bobby Hodges, Internal Revenue Service
Sandy Jaipaul, Internal Revenue Service
Craig Johnson, Department of the Treasury
Gene Kuehneman, Retired
Joseph LeCates, Joint Committee on Taxation
Allen Lerman, retired
Sean Lowry, Congressional Research Service
Robert MacKay, Johns Hopkins University
Jamie McGuire, Joint Committee on Taxation
Edward Nannenhorn, Government Accountability Office
Susan Nelson, U.S. Department of the Treasury
Daniel Newlon, American Economic Association
Katy O'Donnell, "Politico"
Ronald Promboin, retired
Molly Sherlock, Congressional Research Service
Michael Strudler, Internal Revenue Service
Michael Weber, Internal Revenue Service
Joann Weiner, George Washington University
Elwood White, Government Accountability Office
Andrew Whitten, Department of the Treasury
James Wozny, Government Accountability Office
Alexander Yuskavage, U.S. Department of the Treasury

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