Summer School 2: How taxes change behavior and the economy

This episode of Planet Money Summer School, titled "Taxing Our Way to a Brighter Tomorrow," delves into the role of taxes in shaping the economy and society. Robert Smith, along with economics professor Darrick Hamilton, explores how taxes can be used not only to raise revenue but also to redistribute income, stimulate economic growth, and influence behavior. The episode features case studies, including the Earned Income Tax Credit (EITC) and Pigouvian taxes, to illustrate how taxes can incentivize work, correct for negative externalities, and reflect societal values. They discuss the concepts of progressive and regressive taxes, marginal utility, and the potential unintended consequences of tax policies, emphasizing the government's power and responsibility in utilizing taxes as a tool for societal change.