Essays in US Fiscal Policy

Abstract

This dissertation presents three chapters about US tax and spending policy. The first chapter investigates the take-up of a tax refund for corporate losses. We find that few firms claim the refund despite that it dominates the alternative option. This finding indicates that many firms fail to optimize perfectly with respect to taxes. The second chapter estimates corporate responses to a tax incentive for investment. We find the largest responses among small firms and firms without an alternative tax shield, suggesting that the tax incentive operates through both the price and cash mechanisms. The third chapter tests for partisan effects on the distribution of federal spending within congressional districts. Even when conditioning on institutional contexts with greater partisan influence, I find little evidence that parties tilt the distribution of federal spending to favor co-partisan and swing voters.