Robert M. La Follette School of Public Affairs
Wednesday, September 21, 2016

Austin Frerick (MPA ’14)

Austin Frerick (MPA ’14)

Undergraduate education
Bachelor’s degree, Grinnell College

Job title
Financial economist, Surrey fellow

U.S. Department of the Treasury, Washington, D.C.

Start date
May 2015

Primary job responsibilities
At its core, my office is a think-tank for the president of the United States, so we spend a lot of our time researching various tax issues. My job responsibilities though depend on the week. I try to always say yes to anything that comes my way.

At the moment, I am in the midst of three vastly different and exciting research projects. I am looking at pharmaceutical corporate charitable giving, executive compensation, and income sources for those living on and off Native American tribal lands.

Besides my research, I assist in other projects around the Office of Tax Policy and Treasury as a whole. I currently co-coordinate the Freedom of Information Requests (FOIAs) for our office, and I represent the office on a working group overhauling the Treasury’s website. Finally, I am helping the office prepare for the next Administration by modeling both candidates’ tax plans.

Describe a project that best illustrates your job
My first project at Treasury involved a little-known section of the tax code called the 162(m) provision. In 1993, Congress passed legislation that capped the deduction for executive salaries at $1 million, but allowed for unlimited deductions for performance pay in the hopes of curbing excessive compensation.

Yet, compensation expert Graef Crystal thought the law contained so many obvious loopholes that “in 10 minutes even Forrest Gump could think up five ways around it.”* The loopholes in this legislation allow firms to essentially guarantee performance pay packages.

Speaking anonymously to BusinessWeek for fear of losing their positions, members of compensation committees for four of the nation's largest corporations said that 162(m) is merely a nuisance that has not stopped them from paying executives whatever they consider fair.

My boss asked me to explore this policy because he noticed that some companies pay salaries in excess of this deduction limit. He thought this task would be a good way for me to develop my skills working with our data. This fall, Treasury will release the findings of my analysis. My piece is the first analysis using taxpayer data to explore this phenomenon nearly 25 years since its enactment.

If taxed at the highest rate, this provision would have netted $1.1 billion in 2013. These findings raise series questions about the management of compensation boards acting in the fiduciary interest of shareholders. This project best illustrates my job because it shows how we dive into the tax data in the hopes of improving it.

How do you use what you learned at La Follette on the job?
I’ve really grown to love the group-project component to the La Follette education. While problems naturally arose in the midst of group projects, I have gotten to appreciate these experiences in hindsight because I now clearly see how they benefited me in my current job. Capstone is the perfect example of this point. The six of us had only a few weeks to immerse ourselves into a new policy realm (child protective services), come to an understanding of a realistic product we could deliver to our client, conduct site visits, collect the data, clean the data, analyze the data, and put it all together in a final product while working together for the first time. I like to describe it as learning to drive for the first time but doing so on the Interstate instead of a parking lot.

Everyone brings different lenses, experience, and skillsets to a team. The group projects at La Follette helped sharpen my ability to quickly access these differences and direct these strengths into creating the best outcome for whatever project I am working on. At Treasury, I work with very diverse teams on tight timelines and occasionally very sensitive matters, and my ability to do this work successfully is because of what I learned in my group projects at La Follette.

How did your project assistantship fit with your current position?
I am forever grateful to Professor Judi Bartfeld at the Institute for Research on Poverty for pushing me to learn Stata. She wanted me to learn it so that I could analyze the survey results we received from the UW Survey Center. I resisted at first. I had never used a language-based statistical program before. I now use it almost every day at Treasury when I analyze tax data. Just a few years ago, I struggled to write code to analyze a few hundred survey results, and now I am running code that quickly changes all of the corporate depreciation to expensing for American corporations.

Why would you recommend the La Follette School to a prospective student?
La Follette sets itself apart from its peers because of its historically strong relationship with state government and its unique position at UW–Madison. At no point in my La Follette education did I use an imaginary case study; instead, professors connected me with a state agency to work on a project. The ability to work with real clients provided invaluable real-world insight into the dynamics of policy work in government entities.

I also think the school’s interdisciplinary approach to policy is rooted with its unique placement within the College of Letters & Science and its world-renowned departments. To do a thorough policy analysis, one needs to incorporate perspectives from several academic fields like sociology, economics, political science, and history, and to use both qualitative and quantitative research methods. The ability to take courses from faculty located in multiple departments brings these perspectives to the forefront when I worked with real clients.

Finally, I cannot recommend La Follette without raving about Madison. You cannot beat a Saturday in that town from starting your day by strolling the farmers market on the square to closing your day with a sunset beer at the Terrace. Madison is truly a city like no other.

Post-La Follette awards, honors
My first academic paper will be published this winter in the National Tax Journal! I know this is nerdy as heck, but I am very proud of this accomplishment. We also are finishing a follow-up to the piece that uses the same methodology but focuses on pass-through entities. We hope to publish it this fall as an official Treasury report. This is some of the most technical work I have ever done, but I really do believe it will be valuable research especially as corporate-tax reform looks likely in the next Congress.

Why does public service matter to you?
I strongly believe that the environments we grow up in and the institutions we interact with shape our moral compasses and identities. I am the product of an undergraduate institution that challenged us to incorporate social justice into our careers, while La Follette and the Wisconsin Idea pushed us to solve problems and improve the lives of everyone in our communities. Both of these ideas converged in the New Deal with Grinnellians and Badgers taking prominent roles in these social reforms.

Public service to me is this convergence: the incorporation of social justice to help improve the lives of people in my community. This is why public service matters to me, and I hope to develop a career that builds on these traditions.