In order to assess the efficiency of a tax, we should examine its effect on the behavior of individuals. In general, the less a tax affects behavior, the more efficient it is thought to be. The standard example of a non-distorting tax is a lump-sum tax, which does not change with the behavior of...

The tax preference for interest payments by corporations as compared to dividend payments is a long surviving feature of many tax systems. Many have argued that there is no reason for this preference and so it distorts the capital structure of corporations needlessly. This article argues that...

This article considers continuous models of time discounting that evolve dynamically. While constant exponential discounting is the paradigmatic model for time discounting, many models which depart from exponential discounting have been proposed to attempt to more closely match the behavior of...

This essay argues that neuroeconomic research on financial decisions should attempt to focus on standard models that relate to the behavior being studied. It particular, it argues that a key organizing concept for such research should be the stochastic discount factor. Focusing on such models...

The optimality of progressive taxation is influenced by various factors including elasticities of response, taxpayers' ability to hide income, the technology of government enforcement, et cetera. In Taxing the Rich, Scheve and Stasavage point to the large increases in taxes on the rich which...

In this experiment, we test whether the Domar-Musgrave model accurately predicts investor behavior in its paradigmatic setting. Our results indicate that investors only scale up their investments in risky assets to the extent predicted by the model when tax rates are relatively low. Moreover, we...

In this chapter, we discuss some ways in which neuroeconomic research can inform legal scholarship. Given the limitations on space of this chapter, we cannot discuss anything like all of the neuroeconomic research that has been done in the last few years, even all of that which is of relevance...

This article argues that the relationship between the timing of tax payments and the decision of how much tax will be paid may have a greater impact on the level of tax compliance than would be predicted under standard exponential discounting models. To the extent that taxpayers exhibit...

Traditional analysis of tax policy has generally used either the Expected Utility Model or the closely related Subjective Expected Utility Theory to describe how individuals behave under risk and uncertainty. However, the accuracy of this theory has been under attack for a number of decades....