Wojciech Kopczuk is Professor of Economics and International and Public Affairs at Columbia University. Dr. Kopczuk's research focuses on issues related to tax policy and income and wealth inequality. His work has been published in top economics journals, including American Economic Review, Quarterly Journal of Economics, Journal of Political Economy and Review of Economic Studies. He is a co-editor of the Journal of Public Economics and associate editor of the American Economic Journal: Economic Policy.
This summer, Professor Kopczuk teaches Public Economics.
Students will learn how major spending and taxation areas work, including welfare programs, redistribution, social insurance, such as unemployment, disability, Social Security, and health insurance, as well as how tax instruments come into play.
Who should take your summer course, Public Economics? What will they learn?
The course is intended for students interested in understanding the role that governments play (or should play) in modern economies. This is obviously a vast area to cover, so the discussion will be structured around major actual and potential spending and taxation areas. That means that we will talk about welfare programs, social insurance (unemployment, disability, Social Security, health), externalities (for example, environmental), redistribution in general, and the role that various tax instruments (income taxation, corporate taxation, consumption taxes) play. Discussing these topics requires an economic framework (hence, intermediate microeconomics prerequisite), understanding how programs and taxes that exist nowadays work, and empirical evidence that can be brought to shed a light on trade-offs behind and implications of policy changes. As a result, the class will be a mix of economic theory, factual knowledge of policy, and discussion of econometric empirical studies. Other than learning about the economic analysis and empirical strategies, what I hope students will take from the class is a way of systematically thinking about the trade-offs that are behind the myriads of policy proposals and debates that we see coming up all the time
What do you think is the most important area of study in this class?
The theme that runs through the whole class is that understanding why the problem that we need to solve exists is important for understanding how it should be solved. Not every policy has to address every objective. The purpose of environmental policy is to address environmental problems, not to redistribute, and the purpose of income tax isn't to encourage home ownership or change energy use patterns. Using a mix of different tools that are tailored to their specific objectives can make policy more efficient, equitable and simpler.
What are some of the most debated issues in American tax policy? How can an understanding of public finance and tax policy equip students to make an impact?
Policy debates shift over time, but the two broad things that remain is the extent of progressivity of the tax code and relative tax treatment of capital and labor incomes. Those two are closely linked: incomes at the top of the distribution have a larger share of income from capital, but capital is tied with investment, mobile and harder to tax from an administrative standpoint. How to strike the balance here is contested and depends on the empirical evidence, but also calls for re-thinking how the mix of labor income, business, corporate, dividend, capital gains, estate and even consumption taxation is structured and implemented.
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