Matthew C. Weinzierl
Associate Professor of Business Administration
Matt Weinzierl completed his PhD in economics at Harvard University in 2008 and is an Associate Professor in the Business, Government, and the International Economy Unit at Harvard Business School. His research focuses on the optimal design of economic policy, in particular taxation. Prior to completing his doctoral studies, Professor Weinzierl served as the Staff Economist for Macroeconomics on the President’s Council of Economic Advisers and worked in the New York office of McKinsey & Company, specializing in financial services.
Matt Weinzierl completed his PhD in economics at Harvard University in 2008 and is an Associate Professor in the Business, Government, and the International Economy Unit at Harvard Business School. Prior to his doctoral studies, Professor Weinzierl worked in the New York office of McKinsey & Company, specializing in financial services. From 2003 to 2004, he served as the Staff Economist for Macroeconomics on the President’s Council of Economic Advisers.
Professor Weinzierl has written on a range of topics in optimal taxation and optimal economic policy more generally. His most recent projects, associated with the idea of Positive Optimal Tax Theory, focus on identifying and formalizing the goals for tax policy that hold sway among the public, political and economic leaders, and leading tax thinkers, and then characterizing the implications of using those objectives in the analysis of optimal taxation. In other work, he has explored the potential value of age-dependent taxation, the dynamic feedback effects of tax changes, the use of fiscal policy to counteract recessions, the proper price-indexing of Social Security, and the impact of differences in beliefs and tastes across individuals on optimal tax design. His research has been published in Review of Economic Studies, Journal of Public Economics, American Economic Journals: Economic Policy, Journal of Monetary Economics, Economic Journal, Brookings Papers on Economic Activity, National Tax Journal, and Journal of Economic Perspectives, and has been discussed in the Economist, the New York Times, and the Wall Street Journal. In 2008, he was selected to participate in the Review of Economic Studies tour. He is a Faculty Research Fellow at the National Bureau of Economic Research.
Professor Weinzierl is also the creator of an elective course at HBS entitled "The Role of Government in Market Economies." For that course, he has written case studies on public education, national health insurance, welfare reform, immigration, and a variety of topics in taxation. He has recently launched a new set of research projects focused on the commercialization of the space sector and its implications for the provision of space-related public goods.
Professor Weinzierl is married to Coventry Edwards-Pitt, a wealth advisor. Their family lives in the western suburbs of Boston and spends its free time enjoying music, the outdoors, and ice cream.
Positive and Normative Judgments Implicit in U.S. Tax Policy, and the Costs of Unequal Growth and Recessions
Calculating the welfare implications of changes to economic policy or shocks to the economy requires economists to decide on a normative criterion. One way to make that decision is to elicit the relevant moral criteria from real-world policy choices, converting a normative decision into a positive inference exercise as in the recent surge of so-called "inverse-optimum" research. We find that capitalizing on the potential of this approach is not as straightforward as we might hope. We perform the inverse-optimum inference on U.S. tax policy from 1979 through 2010 and argue that the results either undermine the normative relevance of the inverse-optimum approach or challenge conventional assumptions which economists routinely rely upon when performing welfare evaluations. Specifically, U.S. tax policy over at least the last 25 years, and perhaps over the last 40, consistently implies that either the perceived efficiency costs of redistributive taxation or the welfare weights implicitly assigned to high income earners are much greater than what is usually assumed in optimal tax research.
Revisiting the Classical View of Benefit-Based Taxation
This paper explores how the persistently popular "classical" logic of benefit based taxation, in which an individual's benefit from public goods is tied to his or her income-earning ability, can be incorporated into modern optimal tax theory. If Lindahl's methods are applied to that view of benefits, first-best optimal policy can be characterized analytically as depending on a few potentially estimable statistics, in particular the coefficient of complementarity between public goods and innate talent. Constrained optimal policy with a Pareto-efficient objective that strikes a balance-controlled by a single parameterñbetween this principle and the familiar utilitarian criterion can be simulated using conventional constraints and methods. A wide range of optimal policy outcomes can result, including those consistent with existing policies. To the extent that such an objective reflects the mixed normative reasoning behind prevailing policies, this model may offer a useful approach to a positive optimal tax theory.
Why Do We Tax?
There is a mismatch between what many scholars assume is the purpose of taxes and what most people believe for themselves. That mismatch means that the advice experts offer to policymakers and citizens debating tax policy can sometimes seem to miss the point. We could all benefit from fixing this gap.
In this Q&A with HBS Working Knowledge, Prof. Weinzierl discusses his new research that updates the theory of taxation so that its predictions better match what we see in real-world policy.