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Mihir Desai

  • Who Would Pay Biden’s Corporate Tax Increase Is Key Question in Policy Debate

    May 6, 2021

    President Biden is seeking about $2 trillion in higher taxes on companies over 15 years to pay for his infrastructure plan. But corporations are just entities composed of people, so if corporate taxes go up, who ultimately pays? The Biden administration says the greater tax burden would fall largely on high-income shareholders of profitable companies that wouldn’t reduce investments even if taxes rose. That view makes the corporate tax a useful tool for redistributing income and taxing people the U.S. individual-income tax can’t always reach...Economists have long puzzled over the question of who pays the corporate tax. “This is one of the great mysteries in public finance, and so empirical estimates are people feeling around to try to figure it out,” said Mihir Desai, a finance professor at Harvard Business School...Mr. Desai said lawmakers concerned about income distribution should focus more on assisting poorer households and less on raising corporate taxes that could slow investment. “The puzzle to me about the entire debate is just how quickly the corporate tax got mired in this issue of fairness when we know the [effect] is so unclear,” he said.

  • Combatting Inequality: The Tax Code and Racial, Ethnic, and Gender Disparities

    April 21, 2021

    Virtual Hearing. Member Statements: Ron Wyden (D - OR); Mike Crapo (R - ID). Witnesses: Dorothy Brown, Asa Griggs Candler Professor Of Law, Emory University School of Law, Atlanta, GA; Dr. Mihir A. Desai, Mizuho Financial Group, Professor Of Finance and Professor Of Law, Harvard University, Cambridge, MA; Himalaya Rao-Potlapally, Managing Director, Black Founders Matter Fund, Salem, OR; Shay Hawkins, President And CEO, Opportunity Funds Association, Washington, DC.

  • Faculty Books in Brief: Summer 2019

    August 5, 2019

    Books by Cass Sunstein, Mihir Desai, Roberto Mangabeira Unger, and Richard Fallon.

  • Illustration of two people in judges robes holding a funnel with the words we the people flowing through them

    Faculty Books in Brief: Summer 2019

    June 19, 2019

    A single person cannot change a social norm; it requires a movement from people who disapprove of the norm, writes Sunstein. He explores how those movements, ranging from the fight for LGBTQ rights to white nationalism, take shape and effect change.

  • Why You Should Root for the Uber I.P.O. to Fail

    May 10, 2019

    An op-ed by Mihir A. Desai: Uber’s initial public offering — the biggest in a year of blockbusters — is yet another chance for Uber and its detractors to sell their competing ideas of what this company represents. As it heads toward a valuation of about $90 billion — nearly the combined value of General Motors and FedEx — Uber is packaging its new image as a socially oriented company led by a contrite chief executive facing an enormous potential market that it has only begun to explore. Skeptics see a company with significant legal exposure, a corrupt culture, declining profitability and slowing growth that has forced it to make an awkward pivot to less attractive businesses such as Uber Eats and Uber Freight.

  • “Investing is not what you know but how you behave; it is all about having a view of the future,” say Industry experts

    January 16, 2019

    CFA Society India, in collaboration with CFA Institute, the global association of investment professionals, hosted its 9th India Investment Conference in Mumbai with the theme being Investing Insights for Uncertain Times. ... Speaking in his session on 'The Wisdom of Finance', Mihir Desai, Mizuho Financial Group Professor of Finance, Harvard Business School; Professor of Law, Harvard Law School said, "The gulf between finance and the humanities is a real loss. Finance can use the humanisation provided by humanities. Investors are fearful of uncertainties around capitalism. However, they forget how capitalism has benefitted economies around the world. Let's improve practice of finance by reconnecting practitioners with elements of humanity."

  • Why Apple Is the Future of Capitalism

    August 7, 2018

    An op-ed by Mihir Desai. With Apple Inc. now exceeding $1 trillion in market capitalization, it’s tempting to understand this moment in terms of the dominance of all-too-large companies and technology in our lives. Those interpretations obscure Apple’s other accomplishment — pioneering a financial model that is the envy of corporate America. Sure, Apple produces innovative phones and laptops, but look inside its sleek exterior and you’ll find an elegant financial machine that has become the ideal for corporate America. Without investing significantly in hard assets, Apple spins cash and returns it to shareholders at a stunning rate. It’s difficult not to admire.

  • Finance isn’t evil but incentives can be

    May 14, 2018

    Remuneration incentive schemes are at the heart of problems in finance, and need to be overhauled to reflect long-term effort, Mihir Desai, professor of finance at Harvard Business School and professor of law at Harvard Law School told delegates at the CFA Institute annual conference in Hong Kong. Corporate governance is the most important problem in modern capitalism, Desai said, pointing to the fact that 150 years ago ownership and control were not separate, so the corporate governance issues that exist today were not present. “Why do investors trust managers with their money? All of finance is one big daisy chain of principal agent problems,” he said. At the heart of the issue, he said, is remuneration incentive programs

  • Tax Reform, Round One

    April 17, 2018

    An essay by Mihir Desai. The Trump Administration's successful efforts at tax legislation stand out as the primary achievement of its first year. But the hurried, largely furtive drafting, and rush to passage at the end of 2017, have helped obscure the new tax regime’s real impact. Much of the reporting and debate has focused on the politicking that went into passing the bill, and the purported effect on the federal budget deficit. That has diverted attention from the true significance of the Tax Cuts and Jobs Act (TCJA). Instead of simply changing rates and addressing loopholes, the TCJA represents a structural change to the income tax and, consequently, will lead to major changes in behavior.

  • Multinationals pay lower taxes than a decade ago

    March 12, 2018

    Big multinationals are paying significantly lower tax rates than before the 2008 financial crisis, according to Financial Times analysis showing that a decade of government efforts to cut deficits and reform taxes has left the corporate world largely unscathed. Companies’ effective tax rates — the proportion of profits that they expect to pay, as stated in their accounts — have fallen 9 per cent (two percentage points) since the financial crisis. This is in spite of a concerted political push to tackle aggressive avoidance...“There has been a lot of action and gestures that are very visible but the reality is different. Rate cuts and patent boxes [tax breaks for intellectual property] have been the dominant forces on corporate tax — and that reflects the continued dynamics of tax competition,” said Mihir Desai, professor of finance and law at Harvard university. “Call it a great irony or hypocrisy, but it’s one of the two.”

  • Bonuses Aside, Tax Law’s Trickle-Down Impact Not Yet Clear

    January 23, 2018

    There are good ways to start measuring how much the Trump tax cuts might be helping American workers. Tracking the bonus announcements flowing from corporations is not one of them....The flurry of high-profile bonus announcements “are hard to interpret,” said Mihir Desai, an economist at Harvard Business School and Harvard Law School whose research supports the idea that corporate tax cuts lead to at least modest wage increases. “They may well be evidence for these gains, but just as well may be an example of savvy public relations. The reality is we’ll have to wait for a few years and good empirical work to really know the answer.”

  • Economics may not be driving corporate generosity

    January 22, 2018

    Republicans have been touting the number of companies handing out employee bonuses and pay raises — such as Walmart and Bank of America — as a surprising sign that the Trump administration’s tax cuts are working their economic magic faster than anyone expected...But a deeper look at the list of approximately 200 companies shows that more than economics is probably at play, with business experts and analysts saying that alternative motivations are likely to be behind the sudden flood of corporate generosity...Mihir Desai, a finance professor at Harvard Business School whose research was used by the White House to estimate how tax cuts would boost workers’ wages, said he believed the recent wave of bonuses could reflect lower tax rates but also an effort “to take some of the heat off what corporations are currently feeling.”

  • Mihir Desai; First Coast Connect (audio)

    January 10, 2018

    An interview with Mihir Desai...Republicans in Washington struck a tax overhaul deal just before Christmas. It was a major political victory for the GOP Congressional leadership and President Donald Trump. Supporters say the tax overhaul will spur economic growth but opponents say it was just a Christmas present for corporations and the nation’s most wealthy.

  • In Tax Overhaul, Trump Tries to Defy the Economic Odds

    December 21, 2017

    When President Trump adds his distinctive signature to the tax bill, he will also be making a huge bet that the Republican strategy of deep cuts for businesses and wealthy individuals will fuel extraordinary growth across the board...Some provisions of the bill were intended to be sharp and short. Next year, for example, businesses will be able to borrow money and deduct the cost of those loans at the current rate of 35 percent. But later on, when they reap the profits, they will pay a tax rate of only 21 percent. That could end up causing firms to simply shift the timing of investments they would have made regardless of a change in the tax code. “The really hard question a year from now is going to be is how much of the miniboom we see is just an acceleration of stuff that was going to happen anyway or additional investment that is really going to spur the economy,” said Mihir A. Desai, a professor of finance at Harvard Business School.

  • What Investors Need to Consider About Tax Reform

    December 20, 2017

    An article by Mihir Desai. The Senate and House are poised to vote on a tax plan, starting on Tuesday. Here are some questions to consider as we approach 2018: How much of this year's stock market gains reflect anticipation of corporate tax cuts?

  • Mihir Desai explains the Wisdom of Finance

    December 15, 2017

    In this episode of Alphachat, Matt Klein talks with Harvard professor Mihir Desai about the deep connections between finance and the humanities. Special thanks to Elisheba Ittoop for help with editing this episode.

  • Largest Mass. Companies Are Mostly Silent On GOP Tax Plans

    December 6, 2017

    Corporations are the cornerstone of both the House and Senate versions of the tax overhaul. Both bills propose deep cuts in the corporate tax rate — from 35 percent to 20 percent. The bills also call for a territorial tax system to replace the current worldwide tax system, in which multinational corporations with headquarters in the United States are required to pay the U.S. tax rate if they want to bring profits back into the country..."The corporate tax currently is broken," said Mihir Desai, a professor at Harvard Business School and Harvard Law School, whose work was cited (albeit somewhat misinterpreted) by the White House Council of Economic Advisers. "Bringing down the rate and switching the territorial regime so we don't tax corporations on their worldwide income -- both of those are really smart moves."

  • Politics Isn’t the Only Barrier to Real Tax Reform

    November 15, 2017

    An op-ed by Mihir Desai. In the annals of U.S. tax overhauls, 1986 is the modern guidepost. That was when a Republican White House joined forces with a divided Congress to modernize and simplify the U.S. tax code, cutting taxes on most Americans and raising them for some powerful interest groups. It was the last piece of tax legislation to deserve the label “reform.” Republicans promised another set of reforms this year, but have pretty much abandoned comprehensive change in favor of tax cuts, mainly for companies and wealthy individuals. Lacking offsetting revenue increases as significant as those of 1986, the proposals are likely to increase U.S. budget deficits and the national debt.

  • Finding the Good in the Republican Tax Plan

    November 6, 2017

    An op-ed by Mihir Desai. Fiercely partisan reactions are overshadowing the accomplishments of the Republican tax proposal – as well as its misguided aspects. In reality, the plan is a mixed bag that has some good, bad and ugly parts.

  • A Tax Cut That Lifts the Economy? Opinions Are Split

    November 3, 2017

    With the release of an ambitious overhaul of the tax code, House Republicans are moving to fulfill a long-held desire of corporate America: a large and audacious tax cut. Yet economists are divided over whether the plan is likely to revitalize the economy or merely bestow a windfall on the wealthiest investors...Such dismissiveness failed to deter fans of the twin pillars of the House bill: lowering the top nominal tax rate on corporations to 20 percent from 35 percent, and changing the way global profits are taxed. “This will make the United States a better place to invest and a better place to be headquartered in,” said Mihir A. Desai, an economist at Harvard Business School who has at times complained about the White House’s economic claims.

  • Tax Reform Is On The Front Burner Again. Here’s Why You Should Care

    October 25, 2017

    For as much as American politicians and their constituents complain about taxes, the truth is that tax reform packages to address those complaints are rare — the last major reform of the tax code was passed in 1986 under President Ronald Reagan. But starting this week, tax talk is back in vogue in Washington D.C...On a recent and unexpectedly warm day for a New England fall, Harvard Business School Working Knowledge sat down to discuss tax policy in general and reform in particular with HBS Professor Matthew C. Weinzierl and Mihir A. Desai, the Mizuho Financial Group Professor of Finance at HBS and Professor of Law at Harvard Law School, who often testifies before Congress on corporate tax issues.

  • White House Push to Help Workers Through Corporate Tax Cut Draws Skepticism

    October 18, 2017

    The White House inflated the potential benefits to workers from a proposed corporate tax cut, according to a Harvard University economist whose work informed the estimate, highlighting a challenge Republicans face as they push a tax rewrite that President Trump has promised will benefit the middle class. Mr. Trump’s Council of Economic Advisers said in a report released on Monday that reducing corporate taxes could raise average household incomes by as much as $9,000 a year. The top end of that estimate was based on work by a trio of researchers, and on Tuesday one of them, Mihir Desai of Harvard, said Mr. Trump’s team had misread the research...Mr. Desai, who wrote the study with Harvard’s C. Fritz Foley and James Hines Jr. of the University of Michigan, said his own estimates of the effect of such a rate cut was closer to $800 a year. “I’m a believer in corporate tax reform, and I’m a believer in corporate tax cuts, and I believe they would go to workers,” he said. “But I don’t believe those numbers add up.”

  • The MBA is a Grand Tour in the age of Airbnb

    October 6, 2017

    ...It has been a long time coming, but the one or two-year MBA course feels like the Grand Tour of business education in an age of Airbnb. Its graduates are being crowned with powdered wigs just as the digital revolutionaries are sharpening the guillotine...In his new book The Wisdom of Finance, [Mihir Desai] writes about how many of his MBA students avoid risk in order to retain their “optionality”, a concept they had picked up from finance. They “end up,” Prof Desai says, “remaining in companies . . . that were initially intended as way stations that would create more optionality on the path to their actual entrepreneurial, social, or political goals. They often end up saying to themselves, ‘Why not stay another year and create more options for down the road?’ The tool that was supposed to lead to more risk-taking ends up preventing it.”

  • A defence of finance drawing on the arts

    September 28, 2017

    It’s not often – if ever – you’ll come across a book written by a Harvard finance professor who seems just as comfortable talking about the romantic choices of Pride and Prejudice’s Elizabeth Bennet or the business acumen of Stringer Bell in The Wire, as about economic theory. But, in his new book The Wisdom of Finance, Mihir Desai, a professor at Harvard Business and Harvard Law School, has drawn on the arts to make his case...He had two motivations in writing the book. “One, there is a great deal of misconceptions about finance and then finance gets demonised, and a lot of this happens because people don’t understand finance. And my second motivation is that people in finance . . . we have to rehabilitate finance, and look at what we do with a moral lens.”

  • The Wisdom of Finance: Mihir Desai on the link between morality and money

    September 18, 2017

    From the Great Recession to Libor and PPI, money laundering to mis-sold rate swap deals, the world of finance has, in many cases, earned its crown of thorns. But Mihir Desai, the Mizuho Financial Group professor of finance at Harvard Business School, thinks bankers get a bad rap. I caught up with him on a recent trip to London to discuss his book, the Wisdom of Finance. There is, he says, a deep connection between morality and money. I suggest that given recent years, more than a few will disagree. “Oh of course they will, but that’s what I’m trying to change. In fact part of the idea of the title, the Wisdom of Finance, was to put together two words people don’t usually associate.”

  • Trump Tax Plan May Free Up Corporate Dollars, but Then What?

    August 30, 2017

    The tax overhaul promised by President Trump and Republican congressional leaders is lugging a remarkably heavy load. The goal is not only to reduce the tax bills of corporations and small businesses, but also to stimulate investment, create jobs, increase global competitiveness and promote economic growth...Mr. Trump and the Republican leadership have pushed to slash the corporate tax rate and switch to what is known as a territorial system that would tax only profits earned in the United States and not those earned in other countries. Mihir Desai, an economist at Harvard Business School, likes that approach. “We currently have the worst of all worlds,” he wrote in an email. “We have a high marginal rate,” which encourages companies to avoid taxes and puts the United States at a global disadvantage.

  • Move Americans to Jobs, Not the Other Way Around

    August 28, 2017

    An op-ed by Mihir Desai. For far too long, U.S. politicians have been promising to bring jobs to Americans. They should instead be encouraging Americans to move to jobs. The absurdity of tax incentives to "create jobs" reached new heights last month with Wisconsin’s deal to lure iPhone assembler Foxconn Technology Group -- which will reportedly cost taxpayers more than $100,000 per job. By promising to bring employment to depressed areas, politicians have convinced Americans that they have a right to a job where they live, and not that they should live where the jobs are. Even though labor-market incentives to relocate have increased over the past 50 years, with growing differences in wages and unemployment around the country, people actually move for work less and less.

  • Business Book of the Year 2017 — the longlist

    August 15, 2017

    Death, taxis and technology: titles in the running for this year’s Financial Times and McKinsey Business Book of the Year give a new twist to the old maxim about certainty. The 17 books on the 2017 longlist include analyses of the implications of world-changing innovations, from the iPhone to drones; a lively account of the rise of Uber; and a sobering history of the role war, plague and catastrophe have played in shaping our economies...The unexpected symbiosis of the apparently separate worlds of the humanities and finance is the subject of another longlisted title, The Wisdom of Finance by Mihir Desai, which uses literature, history, movies and philosophy to shed light on dry financial theories.

  • The Wisdom of Finance: Using Famous Stories and Philosophy to Understand Money and Investment (audio)

    July 25, 2017

    Economic and Harvard professor Mihir Desai uses philosophy, film, literature, and history to analyze finance as an institution built on morality and humanity. His book explores how the financial industry can be understood through culture, and how deeply finance impacts our personal lives.

  • Capitalism the Apple Way vs. Capitalism the Google Way

    July 18, 2017

    An op-ed by Mihir Desai. While lots of attention is directed toward identifying the next great start-up, the defining tech-industry story of the last decade has been the rise of Apple and Google. In terms of wealth creation, there is no comparison...But the greatest collision between Apple and Google is little noticed. The companies have taken completely different approaches to their shareholders and to the future, one willing to accede to the demands of investors and the other keeping power in the hands of founders and executives.

  • Finance meets humanities — really

    July 18, 2017

    As an economist, Mihir Desai has gained wide recognition for his expertise in tax policy and international and corporate finance. His writing and teaching have covered such topics as proposed reform of the U.S. tax system and the misuse of high-powered incentives and their impact on American competitiveness. But Desai, Mizuho Financial Group Professor of Finance at Harvard Business School and a professor at Harvard Law School, has set aside his usual academic work in a new book, “The Wisdom of Finance: Discovering Humanity in the World of Risk and Return.”...The Gazette spoke to Desai about the book and the argument he advances in it that finance and the humanities have much to gain from reaffirming and strengthening the connections between them.

  • Mihir Desai

    Finance meets humanities — really

    July 17, 2017

    As an economist, Professor Mihir Desai has gained recognition for his expertise in tax policy and international and corporate finance, but Desai--also a professor of finance at Harvard Business School --has set aside his usual academic work in a new book, “The Wisdom of Finance: Discovering Humanity in the World of Risk and Return.”

  • What corporate bankruptcy can teach us about morality (audio)

    June 29, 2017

    An interview with Mihir Desai. Does the world of finance and markets needs a good infusion of humanity? One book examines how how a wider reading of the humanities can help you understand finance and at the same time how finance can help you understand the human condition. It’s by economist and Harvard Business School professor Mihir Desai. He joined Marketplace Morning Report host David Brancaccio to discuss his latest book, "The Wisdom of Finance: Discovering Humanity in the World of Risk and Return."

  • Why Wall Street Went Astray: Eight Ways To Humanize Finance

    May 26, 2017

    Why did Wall Street go astray? For most of the last several centuries, bankers and financiers were the pillars of society, the bastions of morality, the people in society that everyone respected. Of course, there was the odd rotten apple in the barrel, but by and large, bankers were trusted and looked up to. Yet over the last few decades, Wall Street has become almost a synonym of evil. What went wrong? What can be done to restore the financial sector to the level of respect that it once enjoyed? This week, I talked about these issues with Harvard Business School finance professor Mihir Desai, on the publication of his intriguing new book, The Wisdom of Finance: Discovering Humanity in the World of Risk and Return (Houghton Mifflin Harcourt, May 2017).

  • The Trouble with Optionality

    May 25, 2017

    An op-ed by Mihir Desai. The language of finance can be insidious. Words like leverage and concepts like diversification can morph from narrow financial terms into much more general ways of understanding the world. For students that go into finance or business, the idea of “optionality” is particularly pliable—and taken too far, it can be downright dangerous.

  • Good Investors Make Money. Great Investors Create Value (video)

    May 25, 2017

    An interview with Mihir Desai. People have a bad impression of finance, and that's mostly worrying because its often justified, says Harvard Business School professor Mihir Desai. The sector is in dire need of rehabilitation, and there are several ways it can be done. The first is to realize that turning money into more money is a shortsighted investment. To play the long game, the system needs to focus on and reward value creation, which drives innovation and the economy.

  • When Finance Is a Character in a Novel

    May 25, 2017

    Economic forces and incentives shape not only our lives, but also our fiction – and economists rarely miss a chance to point this out. “Economics spotting” isn’t just a parlor game, however. It can help us remember why we care about economics in the first place. In an era when finance can look like alchemy or worse, its appearance in fiction can remind us that its most fundamental ideas are elegant and essential. There’s a bonus, too: approaching finance this way has the potential to enrich finance itself. “The Wisdom of Finance,” a new book by my Harvard Business School colleague and mentor Mihir A. Desai, traces financial ideas as they turn up in literature (as well as in music, film and theater). Desai’s panorama underscores how finance serves basic human needs – and crops up in unusual places.

  • Girl speaking with shapes illustration

    Faculty Books in Brief—Spring 2017

    May 18, 2017

    The concept of speech is typically defined as the communication of thoughts in spoken words. Yet the authors note that First Amendment protection of speech is far broader, covering nonrepresentational art, instrumental music, and even nonsense—individual topics that Tushnet, Chen, and Blocher focus on (in that order) in the book.

  • A win-win path to getting the Trump tax information that really matters

    February 23, 2017

    An op-ed by Mihir Desai and Edward Kleinbard. President Trump’s spokespeople have made it perfectly obvious that he will not release his federal income tax returns during his presidency. Appeals to the tradition of presidents publishing their returns will not change this president’s resolve. Nor is a more forceful approach likely to pry the returns into public view.

  • So, What Is a Border Adjustment?

    January 30, 2017

    On Thursday, White House press secretary Sean Spicer said something sufficiently confusing that for a minute, people believed that the Trump administration intended to raise funds for a border wall by imposing a 20 percent tariff on all imports from countries with which the U.S. runs a trade deficit— including Mexico. It soon became clear that Spicer was not talking about a tariff per se, but something more like the House GOP’s border adjustment tax..."A border tax adjustment is not really a tariff, and it's not typically country specific or good specific. A border tax adjustment is part of a larger tax system where they're trying to tax consumption, and the adjustments are ways to make sure that the tax base is in fact domestic consumption," says Mihir Desai, an expert in tax policy and international finance and a professor at Harvard Business School and Harvard Law School. Desai says that one of the advantages of passing off a border adjustment as a tariff might just be political convenience, characterizing a tax overhaul (which Republicans support) as a protectionist measure. But the border adjustment might be preferable to actual tariffs, which could lead to a trade war.

  • There’s one piece of tax reform that would have a real impact with little resistance

    September 23, 2016

    Corporate tax reform may be the issue with the highest degree of consensus among Republicans and Democrats. But when it comes to most issues regarding personal taxes, it’s been hard for those on both sides of the aisle to agree. That said, in a recent Harvard Business School (HBS) study on competitiveness, professor Mihir Desai explained there is one key area where both sides seem to agree: a minimum tax on the highest earners. While personal tax reform “cuts a little closer to home” than corporate tax reform, according to Desai, changing the tax brackets at the highest level is something that would have a real revenue impacts without too much resistance. Desai, who is both a business and law professor at Harvard, explained that there is a distinct opportunity for a new top tax bracket, especially given the changing composition of the current brackets.

  • The Trump-Obama Corporate Tax Reform Fail

    March 7, 2016

    An op-ed by Mihir Desai. Removing the incentive for American companies to move their headquarters abroad is a widely recognized goal. To do so, the U.S. will need to join the rest of the G-7 countries and tax business income only once, in the country where it was earned. Notably, this principle—called territoriality—is included in the bipartisan framework for international tax reform developed by Sens. Rob Portman (R., Ohio) and Charles Schumer (D., N.Y.) in 2015. Unfortunately, recent reform proposals have a serious flaw: a “minimum tax” on foreign business income. This flaw is in President Obama’s fiscal 2017 budget, and Republican presidential front-runner, Donald Trump, has broached a similar idea on the campaign trail.

  • Harvard Gazette: The costs of inequality — Increasingly, it’s the rich and the rest

    February 10, 2016

    Second in a Harvard Gazette series on what Harvard scholars are doing to identify and understand inequality, in seeking solutions to one of America’s most vexing problems.

  • How crowdsourcing could help simplify America’s tax code

    April 14, 2015

    An op-ed by Mihir Desai. Complaining about the complexity of the tax code has become a treasured ritual during spring tax season. The code has grown ever more complex and this complexity has considerable costs. As one example, the incredible complexity of tax incentives for education limits uptake and redistributes wealth away from those targeted and toward sophisticated taxpayers. How could we transform this ritual of complaining into spring cleaning? Addressing complexity in the tax code requires analogizing to other complex systems and drawing on the research that demonstrates how to manage that complexity. Indeed, there is a well-developed literature on how to manage complex systems that can provide the foundation for simplifying the tax code. In particular, we know a lot about how to manage the evolution of software codes. This analogy yields two primary lessons.

  • Explaining ‘Capital:’ In HLS visit, economist Thomas Piketty discusses his landmark text (video)

    March 18, 2015

    It’s been just a year since Thomas Piketty’s “Capital in the Twenty-First Century” turned the respected French economist from the University of Paris into an academic and publishing rock star. Piketty’s status showed little sign of fading during his March 6 visit to Harvard to speak about the book before an overflow crowd inside Austin Hall at Harvard Law School.

  • Heard on the Hill: Tribe on Clean Power Plan; Shay on international tax system; and Desai and Fogg on tax complexity

    March 16, 2015

    On Tuesday, March 17, two professors from Harvard Law School, Laurence Tribe ’66 and Stephen Shay, will testify before Senate committees. Last week, Harvard Law School Professor Mihir Desai and Visiting Clinical Professor T. Keith Fogg testified before the U.S. Senate Committee on Finance.

  • Foreign Takeovers See U.S. Losing Tax Revenue

    March 6, 2015

    Just months after the Obama administration cracked down on mergers that helped U.S. companies skirt domestic taxes, a wave of foreign takeovers is steering more tax revenue away from Uncle Sam. In deals known as “tax inversions,” which spiked in 2014, U.S. companies acquired foreign rivals and redomiciled in low-tax countries, reducing the taxes paid back home. ...Taxes “aren’t the afterthought” anymore in deal making, said Mihir Desai, a Harvard business and law professor, at a recent tax conference. “They are, in fact, a leading thought in the design of these [cross-border] transactions.”