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The Innovation and Diffusion Podcast

S1 E9: Taxation, Inequality, and Innovation with Stefanie Stantcheva from Harvard University

Mar 5, 2024
Stefanie Stantcheva from Harvard University discusses taxation, incentives for inventors, wealth inequality in the US, zero-sum attitudes towards immigrants, and more with hosts Ruveyda Gozen and John Van Reenen.
51:42

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Quick takeaways

  • Tax policies influence both the quantity and location of innovations, requiring targeted structures for promotion.
  • Historical wealth disparities, influenced by slavery, continue to impact wealth distribution and poverty in the US.

Deep dives

Understanding the Impact of Taxation on Innovation

Innovation, like other economic activities, responds to taxation, influencing the quantity and location of inventions. Research focusing on inventors in the US throughout the 20th century revealed that both personal and corporate taxes affect the number of innovations and inventors, with a stronger influence on where innovations occur rather than on their quality. Corporate and personal inventors respond differently to tax policies, emphasizing the need for targeted tax structures to promote innovation.

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