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• Case | HBS Case Collection | April 2020 (Revised June 2020)

  SpaceX, Economies of Scale, and a Revolution in Space Access

  Matthew C. Weinzierl, Kylie Lucas and Mehak Sarang

  From the time he transformed the world of online banking, Elon Musk established himself as a bold innovator. After selling X.com to PayPal in 2002, he founded a series of revolutionary start-ups, starting with Space Exploration Technologies (SpaceX). Hoping to "make human life multiplanetary", Musk aimed to establish the first Mars civilization, but was unable to procure rockets that would be cheap or reliable enough to make the journey. Over the course of the next decade, SpaceX developed a line of revolutionary rockets that transformed the commercial space launch industry. Using reusable rockets to exploit the benefits of economies of scale, SpaceX cut costs to orbit by a factor of 18 and captured a large percentage of the global launch market, once thought to be inaccessible to newcomers in the industry. But after a remarkable decade, Musk's original goal to reach Mars seemed both within reach and impossibly optimistic. SpaceX developed technologies that would be critical in supporting a crewed mission to Mars, but the cost to get there was estimated to be well above $200 billion dollars in 2014, nowhere near revenues from the launch services market. Would there be enough demand for launch services to make Elon Musk's vision a possibility, or would SpaceX have to find other ways to get there?

  Keywords: space tech; space access; vision; Economies of Scale; Technological Innovation; Emerging Markets; Commercialization; Finance; Aerospace Industry;

  Citation:

  Weinzierl, Matthew C., Kylie Lucas, and Mehak Sarang. "SpaceX, Economies of Scale, and a Revolution in Space Access." Harvard Business School Case 720-027, April 2020. (Revised June 2020.)  View Details

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• Article | Fiscal Studies: The Journal of Applied Public Economics | June 2020

  Understanding Different Approaches to Benefit-Based Taxation

  Robert Scherf and Matthew C. Weinzierl

  The normative principle of benefit-based taxation has exerted substantial influence on many areas of public finance, but it has been largely set aside in the modern theoretical approach to optimal income taxation, where welfarist objectives dominate. A prerequisite for that gap to close is the clarification of what benefit-based income taxation would mean, specifically in a first-best setting. This paper seeks to provide clear, accessible descriptions and novel graphical representations of four major approaches to first-best benefit-based taxation, explain how these approaches relate to each other, and apply them within the Classical Benefit-Based framework for optimal income taxation of Smith (1776).

  Keywords: benefit-based taxation; public goods; Lindahl; Optimal taxation; Taxation;

  Citation:

  Scherf, Robert, and Matthew C. Weinzierl. "Understanding Different Approaches to Benefit-Based Taxation." Fiscal Studies: The Journal of Applied Public Economics 41, no. 2 (June 2020): 385–410. (Also Harvard Business School Working Paper, No. 19-070, August 2019. (Revised January 2019), and NBER Working Paper Series, No. 26276, September 2019.)  View Details

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• Supplement | HBS Case Collection | October 2019

  Should Corporate Profits Be Taxed? (B)

  Matthew C. Weinzierl and Michael Cianelli

  Citation:

  Weinzierl, Matthew C., and Michael Cianelli. "Should Corporate Profits Be Taxed? (B)." Harvard Business School Supplement 720-015, October 2019.  View Details

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