Ideas for lesson plans and exercises

[MattHJensen]

Several professors have asked for example lesson plans or exercises that use OSPC web applications like TaxBrain, the Cost of Capital Calculator, and the Border Adjustment Calculator.

For lack of a better venue at the moment, please post any ideas you have here or email me. They will be very much appreciated.

I expect lesson plans, classroom exercises, or take home exercises would be particularly valuable, but this is open ended. Similarly, there is no need to conform to any particular format -- the goal is simply to provide content that you think will be helpful for professors in their educational capacity.

The professors who have asked all teach fairly introductory courses (intro and intermediate micro/macro, public finance, public policy), but feel free to suggest content for any level.

I am happy to include ideas that would leverage the modeling packages locally so long as they don't require access to puf.csv.

[MattHJensen]

From Dan Feenberg (@feenberg) via email

By far the most requested simulation I receive is for a 5% surtax on incomes greater than $250,000 or $1,000,000. It is a nicely informative exercise because it is simple to program and students could compare the estimate from TB with a back of the envelope calculation from the published SOI aggregate. Here is proposed activity:

Go to the "taxstats" website of the IRS and find the most recent value for the amount of income reported by taxpayers with AGI above $1,000,000. How much revenue would a surtax of 5% on such incomes raise? Now, go to TaxBrain and specify such a surtax. How much revenue is raised with elasticity set to zero? With elasticity set to .4? Why the low number even with no elasticity? Is it a problem that for each taxpayer that some of their income is not subject to the surtax? Can you devise a clawback to prevent that? What happens at the non-zero elasticity?

[jdebacker]

As the final assignment for a master's level public finance course, I would give a project that asked:

This writing assignment is different than the two prior assignments. I’d like to hear your proposal for tax reform in the U.S. Tell me the specific policies you’d like to see changed and what new ideas you’d introduce. Mention those that relate to the administration of both the taxation of individuals and businesses. In your discussion, please discuss the following:

1. Would you move towards a consumption tax base, an income tax base, or a combination of the two?
2. How do your proposals promote economic efficiency?
3. What are the distributional impacts of your proposals?
4. How do you weigh efficiency vs. equity?
5. What are the effects on government revenue? What are your considerations here (e.g., do you require budget neutrality or not?)?
6. How do your proposals affect administration of the tax code? Compliance?
7. What happens to the tax treatment of different business entities?
8. What are the potential political barriers to implementation?

These were the pre-TaxBrain days and so the students would have to cite JCT or others' estimates of proposals similar to theirs for items (3) and (5). But such a project would now be much easier and exact as students could use TaxBrain to look at the revenue and distributional impacts of their specific proposal.