Admission requirements
Prospective students are recommended to have completed at least one year of university education (not necessarily in law or economics). Proficiency in English; both verbal and written; is expected.
Description
Context
Economics is the social science that studies choices and tradeoffs: households and firms only have limited resources (time, money), hence they cannot choose everything all at once. This course serves as an introduction to household and firm decision-making and the role taxes play in affecting agents’ behavior.
We study the challenges faced by governments in designing their tax systems in line with their policy goals while being constrained by individuals and businesses who intend to reduce their tax liability. Such strategic behavior by individuals has implications for economic activity in general and the income and wealth distribution in particular. We study these contributions from an economic perspective, including welfare economics. Rather than focusing on the details of a specific tax law, the course introduces key concepts that help understand the functions and effects of tax systems as a whole. Students can use these concepts to analyze current tax policy debates.
Place within the minor '(inter)national Tax Planning and Policy'
This course is part of the foundational track of the minor ‘(Inter)national tax planning and policy’. The minor investigates the nature and impact of tax planning activities by individuals and companies as well as the policy responses by governments; both in domestic law and through international cooperation. This course introduces students to the economic perspective by studying optimizing behavior of both citizens and businesses; and the strategic behavior of governments in response to this.
Design of the course
The course starts with an introduction of the key economic principles of tax incidence and the welfare loss of taxation. The course then applies these insights to various parts of the tax system. This includes the taxation of income and wealth, and the taxation of businesses. We discuss what tax design implies for income redistribution and what incentives exist for strategic interaction between governments. This includes international cooperation amongst governments on topics such as profit shifting and labor taxation.
Course objectives
Upon successful completion of the course, students know the basic insights underlying the economic analysis of tax systems and are able to apply this knowledge to a number of recent policy debates.
At the end of this course, students will be able to:
explain the basic principles of the economic analysis of tax systems;
describe how the economic perspective compares to the legal perspective;
explain how individuals and businesses behave in response to tax systems;
explain how governments design tax systems strategically and in cooperation with other governments;
interpret recent policy debates using the economic concepts discussed.
Timetable
Zie MyTimetable.
Mode of instruction
Lectures
Number of (2 hour) lectures: 6
Names of lecturers: dr. S.J. Toussaint
Required preparation by students: Not applicable
Seminars
Number of (2 hour) seminars: 6
Names of lecturers: dr. S.J. Toussaint
Required preparation by students: read required literature, prepare the weekly assignment.
Assessment method
Examination form(s)
Written exam (70%): The exam tests the students’ understanding of the course material through a mix of multiple choice and open questions. All material (lecture slides and literature) is examinable.
Weekly exercises (30%): Each week, students work on problem sets relevant to the week’s topic. Each problem set counts for 5%.
Resit, review & feedback
Resits
Retakes are possible for students who do not pass the exam; including students who were absent due to extenuating circumstances. The retake normally consists in a written exam. However; depending on the number of students; we may opt for an oral instead of a written retake.
Regulation retake passed exam
In this course it is possible to retake an exam that has been passed (cf. art. 4.1.8 and further of the Course and Examination Regulations) on the condition that this course is not part of the minor. Students who have passed the exam may retake the final written assessment (test) of the course if they meet certain requirements. For more information; go to the website > ‘Law’ tab > ‘Retake a passed exam’.
Reading list
Obligatory course materials
Literature:
The free online textbook CoreEcon
Additional literature, links to which will be posted on Brightspace
Registration
Registration for courses and exams takes place via MyStudymap. If you do not have access to MyStudymap (guest students); look here (under the Law-tab) for more information on the registration procedure in your situation.
Contact
Coordinator: dr. S.J. Toussaint
Work address: KOG, Steenschuur 25, 2311 ES Leiden.
Contact information: via the institute below.
Telephone number: via the institute below.
Institution/division
Institute: Institute of Tax Law and Economics
Department: Economics
Room number secretary: B2.07
Telephone number secretary: + 31 (0)71-527 7756/1571.
Email: economie@law.leidenuniv.nl