Upon completion of this course, participants will be able to:

• Differentiate between the key principles of tax policy: equity, efficiency, and simplicity.
• Analyze the economic effects of different tax bases, such as income, consumption, and wealth.
• Evaluate the trade-offs between different tax structures (e.g., progressive, regressive, proportional).
• Apply principles of optimal tax design to real-world policy challenges.
• Identify the political, social, and administrative constraints on tax reform.
• Critically assess the impact of tax policy on national savings and investment.
• Design a basic tax system that balances revenue needs with economic goals.
• Understand the role of international tax considerations in domestic policy design.

• Tax Policy Analysts and Advisors
• Ministry of Finance and Treasury Officials
• Legislative Staff and Parliamentary Researchers
• Economists specializing in Public Finance
• Senior Tax Administrators
• Attorneys and Consultants specializing in Tax Law
• Graduate Students in Public Policy or Economics

• Case studies of historical tax reforms (e.g., US 1986, New Zealand)
• Group debates on controversial tax policy issues (e.g., wealth tax)
• Quantitative exercises in calculating tax incidence and deadweight loss
• Policy memorandum drafting (individual assignment)
• Discussions on political economy of tax policy
• Guest lectures from experienced tax policymakers

Unit 1: Foundations of Tax Policy

• Revenue generation and fiscal stability
• Goals of taxation: efficiency, equity, and simplicity
• Taxation as a tool for economic management (e.g., incentives, disincentives)
• Historical perspective on tax policy evolution
• Defining the tax base and tax rate structures
• The concept of tax morale and compliance

• Horizontal and vertical equity principles
• Minimizing excess burden (deadweight loss)
• Administrative ease and compliance costs
• Transparency and stability of the tax code
• Economic neutrality and non-distortionary taxation
• Political acceptability and legal certainty

Unit 2: The Economics of Tax Bases

• Defining income for tax purposes (Haig–Simons definition)
• Individual vs. corporate income tax structures
• The impact of deductions, exemptions, and credits
• Effective tax rates vs. statutory tax rates
• Taxation of capital gains and investment income
• Treatment of foreign-source income

• Principles of Value-Added Tax (VAT) and Sales Tax
• Excise taxes and Pigouvian taxes (corrective taxation)
• The debate between income and consumption taxation
• Property taxes and their economic incidence
• Estate, inheritance, and wealth taxes
• Carbon taxes and environmental levies

Unit 3: Equity and Efficiency Analysis

• Statutory vs. economic incidence of a tax
• The role of elasticity in shifting the tax burden
• Analyzing the distributional impact across income groups
• Measuring tax progressivity and regressivity
• General equilibrium vs. partial equilibrium analysis
• Using micro-simulation models for policy analysis

• The concept of deadweight loss (excess burden)
• Taxation of labor supply and savings decisions
• Impact on investment and capital formation
• Optimal commodity and income taxation (Ramsey rule)
• Minimizing distortions while achieving revenue targets

Unit 4: Tax Design and Reform

• Integrating different tax types (e.g., income, VAT, excises)
• Broadening the tax base and lowering tax rates
• Tax expenditure analysis and control
• Simplifying the tax code for compliance
• Implementing tax reforms: political economy considerations
• Sequencing and timing of reform measures

Unit 5: International and Fiscal Federalism Issues

• The challenge of taxing multinational enterprises (MNEs)
• Principles of source vs. residence taxation
• Tax treaties and double taxation avoidance
• Base erosion and profit shifting (BEPS) challenges and solutions
• The OECD and UN models for tax conventions

• Assignment of taxing powers to different levels of government
• Fiscal equalization and revenue sharing mechanisms
• Tax competition and tax harmonization among jurisdictions
• The role of local property taxation