Book contents
- Frontmatter
- Contents
- List of contributors
- 1 The real world of tax policy
- 2 Federal tax reform
- 3 Federalism and subfederal taxes
- 4 Principles, politics, and the professors
- Public finance in theory and practice
- On the use of ‘distribution tables’ in the tax policy process
- Taxation and economic growth
- Tax reform of the century – the Swedish experiment
- Measuring the impact of tax reform
- What is an ‘optimal’ tax system?
- How tax complexity and enforcement affect the equity and efficiency of the income tax
- Tax policy from a public choice perspective
- What is missed if we leave out collective choice in the analysis of taxation
- Public finance and public choice
- Professional opinions about tax policy: 1994 and 1934
- What can America learn from the British tax system?
- Peculiar institutions: a British perspective on tax policy in the United States
- Index
Public finance and public choice
Published online by Cambridge University Press: 01 June 2010
- Frontmatter
- Contents
- List of contributors
- 1 The real world of tax policy
- 2 Federal tax reform
- 3 Federalism and subfederal taxes
- 4 Principles, politics, and the professors
- Public finance in theory and practice
- On the use of ‘distribution tables’ in the tax policy process
- Taxation and economic growth
- Tax reform of the century – the Swedish experiment
- Measuring the impact of tax reform
- What is an ‘optimal’ tax system?
- How tax complexity and enforcement affect the equity and efficiency of the income tax
- Tax policy from a public choice perspective
- What is missed if we leave out collective choice in the analysis of taxation
- Public finance and public choice
- Professional opinions about tax policy: 1994 and 1934
- What can America learn from the British tax system?
- Peculiar institutions: a British perspective on tax policy in the United States
- Index
Summary
Abstract - This paper explores the contribution that public choice models can make to the traditional efficiency and distributional analyses of tax policy. It notes the relative lack of attention to political economy issues in public finance, at least in comparison with other policy-oriented subfields in economics. It then discusses two key insights that emerge from public choice models of taxation. The first is the notion that different tax systems may be associated with different opportunities for political rent seeking, and the second is the possibility that actual tax systems equate the marginal political cost of raising revenue from different tax instruments, rather than the marginal efficiency cost. The paper concludes with a brief discussion of the role of traditional efficiency and distributional analyses in contributing to tax policymaking, even in a political world.
Most applied tax policy research addresses the efficiency costs of different tax rules, the behavioral effects of taxation, or the distribution of gains and losses associated with a switch from one tax policy to another. There is usually little accompanying discussion of how and why various tax policies are adopted. While most researchers would readily admit that political factors are a fundamental determinant of the tax system, and some with policymaking experience might say “it's all politics,” the implications of this insight receive relatively little attention.
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- Tax Policy in the Real World , pp. 429 - 434Publisher: Cambridge University PressPrint publication year: 1999
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