Monetary policy and taxes
Diercks and Waller use a standard New Keynesian model to explore the relationship between fiscal and monetary policies and equity markets. They find that tax cuts are associated with lower excess equity returns during periods of aggressive monetary policy, as is the case in the US since the 1980s. The reverse is true for the pre-1980 era when monetary policy was less aggressive and tax cuts were associated with higher equity returns.
Taxes and the Fed: Theory and Evidence from Equities
Authors:Anthony M. Diercks, William Waller
From: Federal Reserve Board
Corporate taxation
In 2002 the US government implemented two investment tax incentives policies: a) one policy allowed firms to immediately deduct a “bonus” percentage of the purchase price of new capital assets; and b)the second policy accelerated the tax deduction associated with new investment. Eric Ohrn in this paper finds that both policies significantly increased investments and accelerated the automation of the U.S. manufacturing sector.
The Effect of Tax Incentives on U.S. Manufacturing: Evidence from State Accelerated Depreciation Policies
Author: Eric Ohrn
From: Grinnell College
De Grauwe argues that there are two reasons why information companies should be taxed: a) they create a lot of economic value without the use of many production factors which means few people benefit and b) the main source of their revenue is private information which they collect for free from their users.
Why Facebook should be taxed and how to do it
By: Paul De Grauwe – LSE
If people understand that some macroeconomic policies are unsustainable, why would they vote for them in the first place?
Engineering Crises: Favoritism and Strategic Fiscal Indiscipline
Authors: Gilles Saint-Paul, Davide Ticchi, Andrea Vindigni
From: CESifo
