Striking a balance on taxes
Now that April 15 has come and gone, most Americans have turned their attention away from taxes. But MIT student Stefanie Stantcheva continues to ponder the trade-offs associated with taxation. A fourth-year PhD student in MIT’s Department of Economics, Stantcheva studies optimal taxation — or, as she puts it, “how to set the tax system to generate revenue for the government while still preserving incentives for taxpayers to work and save, and carrying out whatever society deems to be an appropriate degree of redistribution.” Stefanie StantchevaPhoto: Allegra Boverman Stantcheva’s research has shown that taxes don’t just affect incentives for current actions — such as decisions about how much to work — but can also affect long-term investment choices, such as the decision to invest in schooling or on-the-job training (both types of training that economists refer to as “human capital”). These long-term effects of taxation can modify, and...