Public Economics 1
The aim of the course is to consider the principles and practice of tax policy. The course is broadly divided into four parts. Part I presents the starting point of any tax analysis. Part II discusses direct/indirect taxation addressing such questions as: are there good reasons for taxing goods at different rates?, how progressive should income tax be? Part III deals with issues of tax evasion addressing key issues in public policies that relate to the optimal fine and the probability of auditing taxpayers. This is a topic of distinct policy concern and has become much more prominent since the crisis as countries struggle to restore public deficits. It will also look at issues like why people evade their tax obligations, what policies should the tax authorities pursue in attempting to enforce compliance, how significant tax evasion is, and how it can be measured. Part IV addresses questions of international taxation, issues that become increasingly pressing in practice, especially, but not only, following the recent announcement of the U.S. to cut in the U.S corporate tax rate and the fear that this might give rise to international tax competition.
Many of the issues discussed in this module are relevant across countries, such as taxation issues, standard theories of different kinds of taxes, and the justifications and implications for taxation.
Students learn to think like an economist and develop their problem-solving and analytical thinking skills.
Full module specification
|Module title:||Public Economics 1|
BEE2024 or BEE2038 or BEE2025
|Duration of module:||
Duration (weeks) - term 2: |
The module is designed to provide students with an up to date understanding of some of the leading tax policy and tax administration issues of the day.
ILO: Module-specific skills
- 1. An understanding of why we need a public sector
- 2. An understanding of the concept of economic efficiency
- 3. An understanding of the difference between economic efficiency and equity objectives of the government
- 4. An understanding of the problems in government intervention
- 5. An understanding of the design of optimal income redistribution via taxation policies and the inherent trade-off between economic efficiency and equity objectives
- 6. An understanding of the monitoring and administrative costs of taxation
- 7. An understanding of international aspects of tax policy
ILO: Discipline-specific skills
- 8. the skill to apply economic analysis to government policies and the public sector more broadly
ILO: Personal and key skills
- 9. Analytical abilities
- 10. The intensive use of strategic reasoning will develop students' ability to think strategically
Learning activities and teaching methods (given in hours of study time)
|Scheduled Learning and Teaching Activities||Guided independent study||Placement / study abroad|
Details of learning activities and teaching methods
|Category||Hours of study time||Description|
|Form of assessment||Size of the assessment (eg length / duration)||ILOs assessed||Feedback method|
|Problem Solving||Problem sets (one set for each tutorial)||1-10||Oral, Web based, Written feedback|
Summative assessment (% of credit)
|Coursework||Written exams||Practical exams|
Details of summative assessment
|Form of assessment||% of credit||Size of the assessment (eg length / duration)||ILOs assessed||Feedback method|
|Examination||80||2 hours||1-10||Written feedback|
|Individual Assignment||20||1500 words||1-10||Written feedback|
Details of re-assessment (where required by referral or deferral)
|Original form of assessment||Form of re-assessment||ILOs re-assessed||Timescale for re-assessment|
|Examination||Examination (80%) (2 hours)||1-10||August/September|
|Individual Assignment||Individual Assignment (20%) (1500 words)||1-10||August/September|
The following topics will be covered:
- The starting point of tax analysis: Introduction and some basic microeconomics
- Optimal indirect taxation and the Ramsey problem of commodity taxation
- Optimal income taxation
- Tax evasion
- International taxation
Indicative learning resources - Basic reading
Notes will be circulated.
Excellent treatment of the topics can be found in J. Hindriks and G. Myles, (2006) Intermediate Public Economics, MIT Press.
Detailed list of additional sources will be circulated. A.B., Atkinson and J.E Stiglitz (1980). Lectures on Public Economics, McGraw Hill.
G.D.Myles, (1995) Public Economics, Cambridge: Cambridge University Press
Module has an active ELE page?
Indicative learning resources - Web based and electronic resources
Journal articles from various e-journals
Last revision date