The fact that the event was held virtually meant that far more guests than in previous years had the opportunity to participate. In addition to 30 presentations in a total of 11 sessions, the conference included a keynote speech on regional funding programmes by Danny Yagan, assistant professor at the University of California at Berkeley, and a high-profile policy session focusing on tax policy measures to overcome the coronavirus-induced recession.
Development programmes for economically weak regions: A redistribution measure?
In his keynote, Yagan highlighted the extent to which regional economic development programmes can be used as an additional instrument for efficiently redistributing income within society. The findings of his study stand in contrast to the widely held thesis that it is disadvantaged people who should be supported and not disadvantaged places. Yet, in practice, there are many such development programmes that support places instead of people. The EU spends a third of its budget on such regional measures. Yagan explained in his presentation that the two main conditions for these measures to work are that the economic actors either have low regional mobility or experience little change in their income when they move elsewhere. Although classical economic models would also assume that regional funding would lead to an immediate immigration of skilled workers, empirically this is mostly not the case. Thus, he concluded that place-based funding can indeed benefit the local population of a region and thus contribute to reducing inequality in society.
Tailor-made and adaptive taxation measures to overcome the coronavirus crisis
The highlight of this year’s conference was the policy session on tax policy measures to cope with the coronavirus-induced recession. The top-class panel was moderated by MannheimTaxation spokesperson Professor Christoph Spengel. The discussion started with contributions by Professor Michael Devereux, director of the Oxford University Centre for Business Taxation, by the Julius Kreeger Professor of Law at the University of Chicago, Dhammika Dharmapala, by Ruud de Mooij, chief of the Tax Policy Division in the IMF’s Fiscal Affairs Department, and by Professor Nadine Riedel, director of the Institute for Public and Regional Economics at the University of Münster. The panelists and the moderator emphasised the importance of adapting various tax policy measures to the new circumstances created by the pandemic. In this context, Christoph Spengel divided the pandemic development into three phases, i.e. the in-phase, the mid-phase, and the out-phase. The tax policy instruments discussed for these different phases range from tax deferrals and loss carry-forwards to ensure liquidity in the first phase, to the promotion of investments through faster write-offs in the second phase, to the expansion of possible loss carry-forwards in the last pandemic phase. The presentation of these tax measures was followed by a lively discussion on their advantages and disadvantages. Among the controversial issues discussed were the desirability and optimal duration of measures to prevent corporate insolvencies.