CONTENTS
Preface to the Fourth Edition = xiii
Excerpt from the Preface to the First Edition = xv
PART ONE : INTRODUCTION
Chapter 1 : Fiscal Functions : An Overview = 3
A. Introduction = 3
B. The Allocation Function = 7
C. The Distribution Function = 11
D. The Stabilization Function = 13
E. Coordination or Conflict of Functions = 16
F. Interaction of Private and Public Sectors = 19
G. Summary = 21
Appendix : Public Sector in the National Income Accounts = 22
Chapter 2 : Fiscal Institutions = 27
A. Survey of United States Fiscal Structure = 27
B. The Constitutional Framework = 31
C. Implementation of Expenditure Policy = 39
D. Implementation of Tax Policy = 41
E. Other Aspects of Implementation = 43
F. Summary = 44
Chapter 3 : The Theory of Social Goods = 47
A. Social Goods and Market Failure = 48
B. Provision for Social Goods = 51
C. Models of Efficient Allocation = 54
D. Summary = 67
Chapter 4 : Social Goods, Further Considered = 70
A. Mixed Goods = 71
B. Alternative Modes of Provision = 73
C. Bargaining in the Small Group = 74
D. Bases of Wants and Merit Goods = 76
E. Summary = 80
Chapter 5 : Theory of Optimal Distribution = 82
A. Does Equity Belong in Economics? = 83
B. Approaches to Distributive Justice = 86
C. The Size of the Pie = 92
D. Further Issues = 97
E. Summary = 100
Chapter 6 : Public Choice and Fiscal Politics = 102
A. Voting Systems and Individual Choice = 103
B. Applications of Median Voter Model = 111
C. The Theory of Representative Democracy = 114
D. The Leviathan Hypothesis = 117
E. Classes and Interest Groups = 125
F. Summary = 127
PART TWO : EXPENDITURE STRUCTURE AND POLICY
Chapter 7 : Public Expenditures : Structure and Growth = 133
A. Size of the Public Sector = 134
B. Public Expenditure Growth, 1890-1980 = 136
C. Recent Developments and Prospects = 145
D. Causes of Expenditure Growth = 146
E. Summary = 153
Chapter 8 : Expenditure Evaluation : Principles = 156
A. Decision Rules = 157
B. Fundamentals of Project Evaluation = 161
C. Types of Benefits and Costs = 162
D. Measurement of Benefits and Costs = 165
E. Assigning Weights in Project Selection = 170
F. Efficiency and Equity Once More = 174
G. Discounting and the Cost of Capital = 177
H. Risk and Economic Change = 187
I. Summary = 189
Chapter 9 : Expenditure Evaluation : Case Studies = 191
A. Highway Construction = 191
B. Outdoor Recreation = 200
C. Education = 204
D. Budgeting = 209
E. Summary = 213
PART THREE : PRINCIPLES OF TAXATION
Chapter 10 : Introduction to Taxation = 219
A. Categories of Revenue = 219
B. Requirements for a "Good" Tax Structure = 224
C. Summary = 225
Chapter 11 : Approaches to Tax Equity = 227
A. Application of Benefit Principle = 228
B. Ability to Pay and Choice of Tax Base = 232
C. Ability to Pay and Vertical Equity = 240
D. Summary = 244
Chapter 12 : Tax and Expenditure Incidence : An Overview = 247
A. Nature of Tax Burden = 248
B. Concepts of Incidence = 249
C. Measuring Incidence = 253
D. Incidence of the United States Fiscal Structure = 256
E. Summary = 265
Chapter 13 : Principles of Tax Incidence = 268
A. Partial Equilibrium View of Product Taxes = 269
B. Partial Equilibrium View of Factor Taxes = 275
C. Incidence in General Equilibrium = 280
D. Macro Aspects = 286
E. Summary = 287
Chapter 14 : Excess Burden and Efficiency = 289
A. Administration and Compliance Cost = 290
B. Tax Distortions in Partial Equilibrium = 291
C. Tax Distortions in General Equilibrium = 295
D. Efficiency Ranking of Taxes = 300
E. Optimal Taxation = 302
F. Further Aspects of Tax Burden = 304
G. Magnitude of Excess Burdens = 307
H. Neutralizing Private-Sector Distortions = 308
I. Allowance for Merit Goods = 309
J. Efficiency Aspects of Expenditure Policy = 309
K. Why Dead Weight Loss? = 310
L. Summary = 311
PART FOUR : TAX STRUCTURE
Chapter 15 : Development and Composition of United States Tax Structure = 315
A. Development of United States Tax Structure = 315
B. Comparison with Other Countries = 320
C. Summary = 320
Chapter 16 : Individual Income Tax : Defining Taxable Income = 323
A. Major Provisions = 324
B. Structure of the Tax Base = 326
C. Principles of Income Definition = 331
D. Practice of Income Definition : (1) Excluded Items = 335
E. Practice of Income Definition : (2) Deductions = 343
F. Summary = 351
Chapter 17 : Individual Income Tax : Further Problems = 353
A. Tax Preferences = 353
B. Rate Structure = 357
C. Treatment of Low Incomes = 363
D. Choice of Taxable Unit = 366
E. Inflation Effects = 371
F. Tax Evasion and the Underground Economy = 373
G. Issues in Income Tax Reform = 374
H. State and Local Income Taxes = 378
I. Summary = 380
Chapter 18 : Corporation Income Tax : Structure and Integration = 383
A. Structure of Federal Corporation Income Tax = 384
B. Should There Be a Corporation Tax? = 386
C. Distribution of Burden among Shareholders = 390
D. Techniques of Integration = 395
E. Tnpnme Definition = 400
F. Progression and Small-Business Relief = 405
G. Organizations Subject to Special Treatment = 407
H. State Corporation Taxes = 408
I. Summary = 409
Chapter 19 : Corporation Income Tax : Further Problems = 411
A. Incidence = 411
B. A Further Look at Depreciation = 420
C. Investment Tax Credit = 423
D. Effective Rate of Tax = 424
E. Summary = 426
Appendix : Depreciation Rules and Effective Rates of Tax = 428
Chapter 20 : Sales Taxes = 431
A. Sales Taxes in the United States Tax Structure = 432
B. Types of Sales Taxation = 434
C. Value-Added Tax = 441
D. Evaluation of Sales Taxes = 445
E. Personal Expenditure Tax = 448
F. Summary = 452
Appendix : Incidence of Unit and Ad Valorem Taxes = 453
Chapter 21 : Property and Wealth Taxes = 459
A. Rationale for Wealth Taxation = 460
B. Composition and Distribution of Wealth = 463
C. Structure and Base of Property Tax = 464
D. Burden Distribution of Property Tax = 469
E. Appraisal and Outlook for Property Tax = 475
F. Net Worth Tax = 476
G. Capital Levy = 479
H. Summary = 479
Chapter 22 : Death Duties = 482
A. Rationale for Death Duties = 483
B. The Federal Estate Tax = 484
C. The Federal Gift Tax = 490
D. State Inheritance Taxes = 490
E. Summary = 491
Chapter 23 : Payroll Tax = 492
A. Development = 493
B. Coverage = 493
C. Administration = 494
D. Distribution of Burden = 494
PART FIVE : FISCAL FEDERALISM
Chapter 24 : Principles of Multiunit Finance = 501
A. Basic Model of Allocation Function = 502
B. Allocation Function in the Federation = 510
C. Distribution Function = 513
D. Stabilization Function = 515
E. Tax Structure Design = 517
F. Summary = 520
Chapter 25 : The Structure of Fiscal Federalism in the United States = 523
A. Changing Patterns = 524
B. The Federal-State-Local Balance = 525
C. Centralization within States = 527
D. Determinants of Fiscal Position = 530
E. The Grant System = 535
F. Principles of Grant Design = 537
G. Structure of Federal Grants = 545
H. Federal Grants and Equalization = 550
I. School Finance = 554
J. Regional Impact of Federal Finances = 558
K. Summary = 561
Chapter 26 : The New Federalism = 564
A. Recent Developments = 564
B. New Federalism = 567
C. An Alternative Plan = 571
D. Summary = 572
PART SIX : FISCAL STABILIZATION
Chapter 27 : Introduction to Stabilization = 575
A. Policy Targets = 576
B. Demand, Output, and Prices = 577
Chapter 28 : Stabilization Policy with Price Level Fixed = 580
A. Multiplier Models with Investment Fixed = 581
B. Multiplier Models with Investment Variable = 587
C. Comparing Fiscal and Monetary Policy = 591
D. Summary = 593
Chapter 29 : Applications of Stabilization Policy = 595
A. Fiscal Leverage = 595
B. The Role of Built-in Flexibility = 600
C. Timing of Fiscal Effects = 606
D. Rules versus Discretion = 611
E. The Fiscal Policy Mix = 613
F. Summary = 613
Chapter 30 : Output, Employment, and Inflation = 618
A. The Equilibrium Level of Output and Prices = 619
B. Inflation Dynamics and the Phillips Curve = 623
C. Equilibrium Rates of Inflation = 626
D. The Rational Expectation Model = 629
E. Response Lags and Escalation = 631
F. Tax Policy with Inflation = 637
G. Summary = 639
Chapter 31 : Fiscal Policy Experience = 642
A. Earlier Years = 642
B. Fiscal Indices = 643
C. The Seventies = 647
D. The Eighties = 648
E. Summary = 650
Chapter 32 : Fiscal Effects on Capacity Output : A Supply-Side Perspective = 651
A. Effects on Work Effort = 652
B. Effects on Private-Sector Saving = 657
C. Effects on Private Investment = 663
D. Saving and Investment in the Public Sector = 668
E. Fiscal Policy and the Rate of Growth = 674
F. Summary = 680
Chapter 33 : Economics of the Public Debt = 682
A. Growth of the Federal Debt = 683
B. Structure of the Federal Debt = 684
C. Public Debt and Fiscal Solvency = 688
D. Burden on Future Generations = 691
E. Maturity Mix and Interest Cost = 694
F. The Market for State and Local Debt = 701
G. Summary = 703
PART SEVEN : FURTHER POLICY ISSUES
Chapter 34 : Income Maintenance Programs = 709
A. Overview = 710
B. Support of the Poor = 711
C. Status of the Social Insurance System = 717
D. Issues in OASI = 722
E. Unemployment Insurance = 730
F. Summary = 731
Chapter 35 : Public Pricing and Environmental Policy = 733
A. Public Sale of Private Goods = 734
B. Marginal Cost Pricing in Decreasing Cost = 735
C. Peak-Load Pricing = 739
D. Pricing of Social Facilities = 742
E. Pricing Pollution = 743
F. Summary = 756
Chapter 36 : International Public Finance = 759
A. Introduction to Tax Coordination = 760
B. Coordination of Income and Profits Taxes = 761
C. Coordination of Product Taxes = 766
D. Stabilization in the Open Economy = 770
E. Further Problems = 773
F. Summary = 777
Chapter 37 : Development Finance = 780
A. Ingredients of Development = 781
B. Fiscal Policy, Stability, and Growth = 785
C. Tax-Structure Policy = 790
D. Tax Incentives = 800
E. Expenditure Policy = 804
F. Summary = 806
Indexes = 809
