1. Tax and inequality The recent Republican tax plan sought to repeal estate tax (inheritance tax). Who will benefit from this change? In fact, a number of countries have abolished inheritance tax in the last few decades. What would be your explanation for the fading of inheritance tax? (This tax was one of the key demands from the working class in the 19th century, remember, in communist manifesto, Marx and Engles argued for "Abolition of all rights of inheritance") b. Using the theory of tax incidence, discuss the short term and long term incidence of increasing corporate income tax c. Discuss whether deductions of education expenses and state/local taxes in personal income tax increase or decrease inequality d. Use the data from World bank data (http://databank.worldbank.org) There is controversy regarding whether higher tax leads to equality or inequality. Do a simple scatterplot of the two factors (two axis: tax to GDP ratio, Gini coefficient) for 10 countries (you choose the countries) for any year What do you think better describes the relationship between the two? 1. Tax and inequality The recent Republican tax plan sought to repeal estate tax (inheritance tax). Who will benefit from this change? In fact, a number of countries have abolished inheritance tax in the last few decades. What would be your explanation for the fading of inheritance tax? (This tax was one of the key demands from the working class in the 19th century, remember, in communist manifesto, Marx and Engles argued for "Abolition of all rights of inheritance") b. Using the theory of tax incidence, discuss the short term and long term incidence of increasing corporate income tax c. Discuss whether deductions of education expenses and state/local taxes in personal income tax increase or decrease inequality d. Use the data from World bank data (http://databank.worldbank.org) There is controversy regarding whether higher tax leads to equality or inequality. Do a simple scatterplot of the two factors (two axis: tax to GDP ratio, Gini coefficient) for 10 countries (you choose the countries) for any year What do you think better describes the relationship between the two