Governments hardly resist to change taxes retroactively to raise revenue from actions taken in the past under a different tax code (see here for the latest). In a recent paper in the JEEA, Joana Pereira and I show that retroactive taxation is a source of fiscal and macroeconomic instability. Our findings endorse the notion, formulated by Harold M. Somers, that retroactive taxation is a triumph of law over economics
The Covid-19 pandemic has brought about changes in key income support programs, reigniting a debate about the design of financial aid to low-income households with children. In a paper with Nawid Siassi, we assess the Family Security Act—a proposal presented by Senator Mitt Romney (R-UT) on February 4, 2021 to reform the tax/transfer system. The assessment is carried out through a structural microsimulation approach, using a dynamic model of savings, labor supply, household formation, and marital status. We find that while the plan would be highly effective at increasing marriage rates it would reduce child poverty at the expense of increasing poverty among single-mother families and child deep poverty. Furthermore, the plan would entail a substantial cost to taxpayers.