Fiscal Policy

In new research, Annette Alstadsæter, Niels Johannesen, Ségal Le Guern Herry & Gabriel Zucman find that Norwegian households that become wealthy today are much less likely to adopt offshore tax evasion strategies under modern high-transparency standards. 

Wealth taxes can make capital markets more efficient when they are optimally combined with lower capital gains taxes, argue Sergio Ocampo, Guttorm Schjelderup, and Floris Zoutman in new research.

In new research, Matthias Breuer and Qingkai Dong examine how federal data collection can influence local spending. They examine road surveys, showing that roads included in federal samples are more likely to be funded and those that are not often face funding and safety declines, reflecting a need for improved measurement systems.

In recent research, Yumin Hu, Luca Macedoni, and Mingzhi Xu explore how high income inequality can raise the costs of living. They compare grocery products around the U.S., finding that large retailers will increase the prices for their goods in places where income inequality is also high.

Many studies have assumed that United States tariff costs are passed onto consumers. In new research, Vanessa Alviarez, Michele Fioretti, Ken Kikkawa, and Monica Morlacco argue that buyer-seller relationship dynamics allow dominant U.S. importers to instead force higher costs onto exporters.

Max von Thun writes that Enrico Letta, Mario Draghi, and Emmanuel Macron are right in demanding a new economic vision for the European Union. However, they are wrong to advocate for corporate consolidation as part of the solution. The EU must pursue competition rather than consolidation if it is to create a robust political economy that can take back power from corporate behemoths, deliver growth and jobs to European citizens, and guarantee the future of the European project.

Travis St. Clair outlines how fiscal problems at the local level often stem from short-term fiscal and electoral incentives as well as voters’ limited attention. He reviews potential solutions to improve the financial transparency and long-term planning of local governments.

Kent Hiteshew and Ivan Ivanov write that the United States municipal bond market suffers from fragmentation, poor liquidity, and inadequate disclosure due to the dominance of small, infrequent issuers who struggle to meet regulatory disclosure requirements. They argue that greater involvement of state-backed municipal bond banks could help address these issues by pooling smaller issuances, reducing borrowing costs, and streamlining disclosure obligations for local governments.

New research from Renping Li finds that consolidation among investment banks has produced higher underwriting costs for local governments in issuing muni bonds. Importantly, Li says these costs are not offset by efficiency gains and that the result is a deterioration in local government finances.

Much of the focus of recent antitrust scrutiny has been on companies, with very little attention paid to the motivations of the individual managers setting the anticompetitive strategies of their enterprises. Understanding the concrete personal incentives of the billionaire blockholders entrenched at the helm of most of America’s incumbent corporations is critical to devising effective competition, corporate governance, and tax policy fixes to tackle harmful market concentration at the root.