Prof. Esther Duflo will present her research on poverty reduction and her “proposal for a global minimum tax on billionaires and increased corporate levies to G-20 finance chiefs,” reports Andrew Rosati for Bloomberg. “The plan calls for redistributing the revenues to low- and middle-income nations to compensate for lives lost due to a warming planet,” writes Rosati. “It also adds to growing calls to raise taxes on the world’s wealthiest to help its most needy.”
Writing for The Hill, Sloan Prof. Catherine Wolfram and UCLA Prof. Kimberly Clausing explore why they feel U.S. politicians should embrace carbon pricing. “2025 will be a big year for Congress to tackle longstanding fiscal issues and further climate policy efforts,” they write. “Before this can happen, politicians need to hear timely arguments backed by up-to-date evidence.”
Prof. Jonathan Gruber, MIT Innovation Fellow Brian Deese and Stanford doctoral student Ryan Cummings write for The New York Times about the health benefits of new weight-loss drugs and the risk they pose to American taxpayers. “The magnitude of potential benefit and potential cost — roughly $15,000 per year per person — posed by these drugs suggests that policymakers may have no alternative but to step in and bring their costs in line with their social benefits,” they write. “If policymakers succeed in doing so, we could build a model for drug price negotiation that enables an extraordinary medical breakthrough to improve both our health and our fiscal position.”
A study by MIT researchers shows that “workers have cost employers a 25% tax rate, while the rate of software and equipment has stood around 5%,” write Diego Areas Munhoz and Samantha Handler for Bloomberg. “This lopsidedness in tax code gives employers more reason to invest in automating goods like machines and computer software instead of workers.”
A new white paper by Prof. Daron Acemoglu and graduate student Andrea Mandera finds that the U.S. tax code incentivizes companies to invest in automation rather than employees, reports Peter Coy for Bloomberg. “Favorable taxation of capital leads to excessive automation,” explains Acemoglu.
Writing for Forbes, research affiliate Thomas Davenport examines the feasibility of robot taxation based on a debate at MIT Technology Review’s Emtech Next conference. “At some point we may need to replace the tax revenue from human jobs lost to automation,” writes Daveport. “If that day ever comes, I hope that the tax revenues issue is the most critical one we have to deal with.”
Prof. Emeritus and Nobel laureate Peter Diamond speaks with Meghna Chakrabarti of On Point about U.S. Rep. Alexandria Ocasio-Cortez’s proposal to increase the top marginal tax rate to 70 percent. “That will raise a lot of money that we could [use to] address some of our shortfalls and that will help us prepare for the large costs coming from climate change,” says Diamond of the proposal.
Vox reporter Emily Stewart writes that a working paper co-authored by MIT researchers finds that companies that benefited from recent tax cuts were more likely to announce new benefits for workers. Stewart writes that the researchers found, “companies with larger expected tax savings were likelier to announce a boost for workers. So were companies with political action committees that donate to Republicans more than Democrats.”
In an article for Bloomberg News, Prof. Daron Acemoglu writes about how countries that democratize tend to see faster rates of economic growth. Acemoglu notes that what tends to spur economic growth is how, “democracies increase taxes and spend more on education and health, preparing the economy to achieve greater productivity in the decades to come.”
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Robert C. Pozen, a senior lecturer at Sloan, writes for The Boston Globe about how the new tax act would create potentially major fiscal challenges for “cities with large unfunded liabilities for pension benefits and retiree health care.” He addresses several ways in which cities might make adjustments to mitigate the losses, citing data from JP Morgan.
With additional cash expected as a result of the Tax Cuts and Jobs Act, public companies should make capital investments in sustainable project and programs, suggests Senior Lecturer Robert Pozen in a piece for Fortune. “Now is the time for public company executives to invest for the future—to create jobs and expand local facilities,” writes Pozen.
Bloomberg's Tom Moroney spoke with MIT President L. Rafael Reif about the tax bill's impact. Describing the tax as a "budget cut" for MIT, Reif emphasized higher education's vital role in America's innovation economy and said it's counterproductive, "to hurt the institutions that create innovation, create startups, and prepare people for those jobs."
In a Financial Times article, Senior Lecturer Robert Pozen details how the proposed tax plan would encourage employers to relocate US jobs to foreign countries. As a result of the foreign profits minimum tax, countries could “offer a corporate tax rate at 10 percent to US companies if they would relocate their manufacturing or research facilities,” explains Pozen.
Writing for The New York Times, graduate student Erin Rousseau examines how the House tax bill would negatively impact graduate students in the U.S. The bill, “would make meeting living expenses nearly impossible, barring all but the wealthiest students from pursuing a Ph.D. The students who will be hit hardest are those from communities that are already underrepresented in higher education.”
Ike Brannon writes for Forbes about a survey he conducted with Prof. Michelle Hanlon asking equipment manufacturing companies what they want from tax reform. The majority of respondents in this diverse industry were in favor of removing all business tax breaks to “achieve a corporate income tax in the vicinity of 20 percent that is fully ‘paid for’,” writes Brannon.