Designing Efficient College and Tax Policies

@article{Findeisen2015DesigningEC,
  title={Designing Efficient College and Tax Policies},
  author={Sebastian Findeisen and Dominik Sachs},
  journal={Public Economics: Taxation},
  year={2015}
}
The total social benefits of college education exceed the private benefits because the government receives a share of the monetary returns in the form of income taxes. We study the policy implications of this fiscal externality in an optimal dynamic tax framework. Using a variational approach we derive a formula for the revenue effect of an increase in college education subsidies and for the excess burden of income taxation caused by the college margin. We also show how the optimal nonlinear… Expand
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