Center for Public Finance

The research of the Center for Public Finance focuses on the effects of major U.S. fiscal policies. Given the complexity of the U.S. tax system and the unsustainability of current U.S. tax and spending policies, the center in 2017 received a five-year, $3.2 million grant from the Charles Koch Foundation to fund an initiative — the Dynamic Analysis Program — to study the potential effects of fiscal reforms and inform policymakers and the general public about the findings. 

The Dynamic Analysis Program also will examine the challenges facing the country if policymakers continue to delay finding and implementing solutions to these critical issues. The program plans to work with other economic modeling groups to increase the accessibility of this type of analysis by creating more open-source models and training students on how to use them.

The simulation of the effects of U.S. tax reforms is accomplished using a large-scale dynamic computer general equilibrium model constructed by John Diamond and George Zodrow. Diamond and Zodrow's other work has focused on earnings volatility, income mobility and inequality, alternative funding options for public schools, state and local investment tax incentives, state sales taxation of services, the optimal taxation of electronic commerce, the effects of the property tax, the effects of adopting education vouchers, and public employee pension liabilities. In addition, they and other center scholars actively participate in the policymaking process by advising various national government agencies, state and international governments, and multilateral development institutions, as well as various key individual policymakers. Center scholars have also have been asked to testify before federal and state government committees.