Author: Mary Eschelbach Hansen
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Tax Policy, Inequality, and the Future of the American Economy | April 23, 2025
Please join IMPA and the Department of Economics for a timely conversation about the future of U.S. economic policy — and the democratic and institutional values that underpin it. 10:00 am | Welcome reception | Join us for coffee and light breakfast 10:30 am – noon | Program | Details below American University, SIS Building,…
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Technical Note on the Economics of Taxing Capital Gains
This technical note describes how, under the current system of capital gains taxation, capital gain income is taxed at lower rates than labor income—and only upon realization of the gains and with a step-up in basis at death. This system distorts the economy and contributes to inequality. Lower tax rates on capital gains income do…
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Taxing Excessive Profits: Designing a Pro-Competition Corporate Tax System
This brief, authored by Ira Regmi and Niko Lusiani, lays the groundwork for a pro-competition corporate income tax system, emphasizing the economic rationale for taxing the excess profits of large U.S. businesses. A preliminary draft was shared to kick off the IMPA-RI co-organized expert convening at American University in October 2024
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Promoting Equity and Efficiency: Rethinking Corporate Taxation to Address Market Power | October 2024
This closed-door convening brought together experts from academia and policy circles to explore the design of a corporate tax system that effectively balances efficiency and equity. Hosted by the Institute for Macroeconomic Policy Analysis and co-organized with the Roosevelt Institute, the event focused on strategies for crafting a truly pro-competition corporate income tax framework. A…
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Equity Prices, Market Power, and Optimal Corporate Tax Policy
This academic paper studies the optimal design of corporate tax policy in a textbook life-cycle model featuring two key deviations: (i) firms are imperfectly competitive and (ii) households save by purchasing equity shares in a stock market. In this simple environment, the financial wealth of savers is equal to the sum of the productive capital…
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Technical Note on Estimating the Overall Effect of Corporate Tax Reforms
This technical note first describes key differences between estimating the impact of a change in tax policy at the firm (microeconomic) level and at the overall (macroeconomic) level. It then explains how macroeconomic models are used to infer the overall effects of policy reforms and how alternative assumptions – such as the presence of market…
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Assessing the Effects of a Dividend and Capital Gains Tax Increase
This brief provides a new analysis of the macroeconomic effects of raising taxes on dividend income and capital gains. Increasing dividend income and capital gains taxes from 20% to 39.6% for households earning over $1 million would raise government revenue by about 5% and GDP by about 1% in the long term. The proposed tax increase…
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Capacity Utilization, Markup Cyclicality, and Inflation Dynamics
This academic paper studies the relationship between firms’ decisions about capacity, its utilization, and inflation. To do this, we introduce endogenous capacity utilization into a New Keynesian (NK) model. In our model, firms set capacity under demand uncertainty, utilizing both an effort margin and capacity expansion to meet demand. This mechanism implies that firm-level productivity and desired…
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Inequality and the Macroeconomy: Academic and Policy Challenges | April 2024
IMPA celebrated its first anniversary on April 17, 2024, with a colloquium on Inequality and the Macroeconomy: Academic and Policy Challenges.
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Workshop on Post-Pandemic Macroeconomics | March 2024
Together with Columbia University’s Institute for Policy Dialogue and Center for Political Economy, IMPA co-sponsored the Workshop on Post-Pandemic Macroeconomics, held at Columbia’s School of International and Public Affairs on March 22-23, 2024.