Every good or service exchanged or purchased within the economy is taxable. People pay taxes on everything they buy and earn, as taxes are also taken off our paychecks in order to pay for schools, hospitals, roads and other government-funded services. Depending on the state of the economy, taxes are bound to go up during a recession, while they often drop in better financial climates. Tax economists study this tax phenomenon analyzing the economic impact of existing or proposed tax laws on revenue and through analysis, provide statistical summaries.
Tax economists review and analyze economic data in order to prepare reports that detail the results of a tax investigation and stay up to date with economic changes that relate to taxes. They conduct research, analyze statistical information and prepare reports and plans that are used to predict potential tax problems. They anticipate tax patterns and offer innovative ideas for solutions to new tax initiatives. In a nutshell, they attempt to provide people with a practical understanding of how taxes affect our economy.
The well-being of our economy affects our everyday lives therefore it is important that people understand how it works and learn about its behavior patterns. Tax economists study the economy and all of the tax statistics surrounding it. They are interested in the factors that influence the well-being of people and they aim to find solutions to improve people's standard of living. Tax economists have to know everything about the strengths and weaknesses of economics, and economic methods and theories. It is also important that they are up to date with technological developments, politics and current affairs. They use models and methodologies to think about the world and specific tax issues, which may require knowledge of maths including statistics, human behavior, and overseas economic ideas and trends.
Some people think of tax economists as economic fortune tellers or predictors of our future economy. They must, in fact, forecast how they believe taxes changes will alter our economy based on the research and analysis they compile. Tax economists use their knowledge and analytical economic research to advise businesses and other organizations, including insurance companies, banks, securities firms, industry and trade associations, labor unions, and government agencies. They must present their statistical concepts in a clear and meaningful way so that people can understand what their data really means.
Tax economists who work for the government may assess economic conditions in the US or in foreign nations in relation to taxation order to estimate the economic effects of specific changes in tax legislation. Tax economists write reports of their findings and present their cases to their employers.
Tax economists have strong mathematical, statistical and analytical skills. They enjoy developing innovative and creative economic tax models, analyzing information and making economic forecasts and communicating ideas in clear and logical ways (using plain language to describe complex issues). They come into contact with many abstract concepts therefore they must enjoy difficult problem solving.
Typical Tasks
Analyze the impact of existing or proposed tax laws on revenue and provide statistical summaries for public release
Design and use statistically reliable economic models to aid in quarterly economic forecasts
Obtain tax structure and collections data from other public or private agencies
Provides revenue related data and nonmathematical information to other agencies, academics and public interest groups
Conduct research and develop models that illustrate and forecast economic behavior and patterns based on tax analysis and devise methods for the collection and analysis of data
Analyze factors that determine economic growth and advise government agencies on policies to increase economic activities
Study mathematical formulas and statistical techniques and apply them to the testing and quantifying of economic theories and the solution of economic problems
Study the nature of money, credit and credit instruments and the operation of banks and other financial institutions to develop monetary policies and forecasts of financial activity
Study statistics on the exchange of goods and services among nations and the tax laws surrounding this
Conduct research on market conditions in local, regional or national areas to set sales and tax levels for goods and services, as well as assess market potential and future trends
Tax economists generally work in office environments using computers and other forms of research materials to compile and analyze data. Working hours are usually long (up to 10-hour days) and additional hours are often required on weekends or during the evening. They may travel locally and globally to present economic information to clients, to carry out research, and to attend conferences and meetings. They may also travel overseas to conferences and to do contract work in developing countries
Workplaces, Employers and Industries
Tax economists work mainly in the public sector, however some are employed in private companies. They are mostly employed by the government, especially in the financial departments doing constant statistical and analytical research that affects the government tax budget. In the private sector, they may be employed by research institutions, large organizations in finance and business, consulting and marketing firms, and non-governmental organizations (NGOs) such as the World Bank or the United Nations, amongst other places.
Long Term Career Potential
Tax economists have the ability to move around different analytical financial sectors. They may decide to work as a business analyst, banker, or stockbroker. Some may decide to become teachers at universities and colleges. Many tax economists are employed as economic consultants to advise business, industry, government, labor and others. Some may even open up their own consulting firms. They can also advance into technical writing positions as they have experience writing clear and concise works.
Educational Paths
As a minimum industry standard, tax economists generally require a university degree in economics or other field of finance and business. Many tax economists also have a Master of Business Administration (MBA) and some even have PhDs. A master's or doctoral level degree is required for teaching at the postsecondary level and advancement into senior positions. They usually require several years' experience in their field of work. Any programs or courses that expose a student to the world of business and finance are also useful.
