Tax inversions and Ronald Coase

Ronald H. Coase Pfizer and Allergan called off their $150 billion merger this morning.  What caused these two companies to call the whole thing off? The headline reason for not going through with the transaction was that the Treasury Department changed the rules on tax inversions.  A tax inversion is a situation where a US-headquartered company, in this case Pfizer, merges with a … [Read more...]

Tax credits for higher education don’t help

“There are many ways a society can finance college, and over time the US has tried almost all of them.”  Thus begins a new paper, “Tax Benefits for College Attendance,” by Susan Dynarski and Judith Scott-Clayton. American governments currently subsidize higher education in three ways.  First, state and federal governments directly fund a variety of higher education institutions, including … [Read more...]

New work on undocumented immigrants and the American labor force

Source: Flikr Creative Commons Donald Trump calls for deporting all 11 million undocumented immigrants.  What effects would this have on the US economy? To answer this question, we first need to have a sense of the labor supply behavior of undocumented immigrants.  That is, we need to know information such as their employment rate and their sensitivity to changes in US wages (i.e. their labor … [Read more...]