Taxes, Spending, and Innovation

USC CLASS Research Papers Series No. CLASS19-14

USC Law Legal Studies Paper No. 19-14

6 Pages Posted: 27 Mar 2019 Last revised: 9 Feb 2021

See all articles by Michael Simkovic

Michael Simkovic

University of Southern California Gould School of Law; University of Southern California - Marshall School of Business

Date Written: May 15, 2019

Abstract

Part I: Billionaire Taxes, https://ssrn.com/abstract=3326615.
Part III: After Paying Ultra-High Net Worth Wealth Taxes, How Much Would Billionaires Have Left to Live on?, https://ssrn.com/abstract=3340925.

Key Takeaways:

- Innovation is the product of teamwork.
- Engineers and scientists play a critical role.
- Scientific research is insufficiently rewarded financially.
- Taxes can boost innovation by funding human capital investment and basic research.
- The amount of investment is important – who owns financial assets is not.

In formulating taxation and public investment policies, we should carefully consider data and the peer reviewed literature. Claims that we can drive more innovation and growth through a higher concentration of resources in the hands of a small number of billionaires — while providing fewer resources to middle and upper middle-class knowledge workers — are not empirically supported.

Keywords: wealth tax, income tax, wages, tax wedge, capital gains, estate tax, inheritance tax, innovation, patents, human capital

JEL Classification: H2, H24, H22, H23, H25, H26

Suggested Citation

Simkovic, Michael, Taxes, Spending, and Innovation (May 15, 2019). USC CLASS Research Papers Series No. CLASS19-14, USC Law Legal Studies Paper No. 19-14, Available at SSRN: https://ssrn.com/abstract=3335386 or http://dx.doi.org/10.2139/ssrn.3335386

Michael Simkovic (Contact Author)

University of Southern California Gould School of Law ( email )

699 Exposition Boulevard
Los Angeles, CA 90089
United States

University of Southern California - Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA California 90089
United States

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