FIT analyzes the effects of the tax-benefit system and regulation on individuals, firms, and the society, and provides new credible evidence on the determinants of optimal policy. Achieving the aims of taxation and other related policies requires careful attention to details of tax system design. In the spirit of Esther Duflo’s (2017) “economist as plumber” metaphor, the economist-plumbers of FIT consider the design of the tap and the detailed layout of the pipes that make up a tax system. We provide research results that help to locate and fix leakages in the system: Leakages stem from individuals changing their behavior due to taxes and administrative rules, which may reduce economic activity, tax revenue, and welfare. Such costs need to be carefully measured and weighed against the benefits of taxation.
News
-
News |Finnish child home care allowance has negative impacts on mothers’ careers and on child outcomes
According to a recent study, Finnish Home Care Allowance has negative effects especially on mothers as well as children. The effects are due to the nature of Home Care Allowance: it not only is a transfer of income but also guides the parents’ decisions to remain home with their children for longer periods, reducing their employment.
The study contributes to the existing literature on the matter by considering the effects of Finnish home care allowance program on long-term working careers, in addition to the short-term effects. The study contributes by looking at both short- and medium-term outcomes on mothers and children in the same institutional setting. Finally, the data from child health clinics on children are unique and have not been used in prior research.
-
News |Physicians working in the private sector prescribe expensive medication for the patients, despite there being more affordable alternatives available
A recent study by Finnish Centre of Excellence in Tax Systems Research investigates the drug prescriptions made by physicians in the private and public sector to treat high cholesterol and type two diabetes. The results are clear: physicians working in the private sector are significantly more likely to prescribe their patients expensive medication, even though there are more affordable approved alternatives available.
-
News |VoxEU column: Pre-distribution requires redistribution:
The concept of pre-distribution has gained popularity in the policy discourse, with some arguing that it is superior to conventional redistribution through tax and transfer.
-
News |What We Know About Tax Systems, How We Know It, and What We Still Need to Know
The keynote address given by Professor Joel Slemrod (University of Michigan) at the inaugural seminar of The Finnish Centre of Excellence in Tax Systems Research (FIT), University of Tampere, Finland, on September 1, 2022.
-
News |Are you distorting occupational choice or designing a tax policy? Tax policy design for settings with evasion and occupational decisions
Tax policy design aims to vanish evasion incentives but can also affect agents’ occupational choices. Tax schemes, auditing, and the size of the IRS affect agents’ decisions, and the government must be aware of this. This article summarizes a study of the optimal tax policy design when evasion and occupational decision coexist.
-
News |Product Survey
You are invited to participate in a FIT research project and answer a survey on consumption patterns.
The survey is a part of research project focused on studying consumption behavior and how it is affected by consumption taxes and other policies.