CARE Seminar: Patrick Kennedy, University of California, Los Angeles
Speaker
Patrick Kennedy, University of California, Los Angeles
Biography
I work in the field of public economics. My research uses tools from public finance, labor, and trade to study the effects of public policies on firms, workers, and places.
Some of my interests include:
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U.S. tax policy
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Tariffs and protectionism
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Place-based and local housing policies
Title
The Efficiency-Equity Tradeoff of the Corporate Income Tax: Evidence from the Tax Cuts and Jobs Act
Abstract
We study the effects of the largest corporate income tax cut in U.S. history on firms and workers. To identify causal effects, we use employer-employee matched tax records and event studies comparing similarly sized firms in the same industry that faced divergent tax changes due to their pre-existing legal status. Tax cuts cause increases in sales, profits, investment, employment, and payrolls, with earnings gains concentrated among highly paid workers and executives. Interpreted through a stylized model, reducing corporate taxes by $1 generates $0.44 in additional output, with 80% of gains flowing to the top 10% of the income distribution.