The Economics of Taxation, 2e

by Salanié

ISBN: 9780262297813 | Copyright 2011

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This concise introduction to the economic theories of taxation is intuitive yet rigorous, relating the theories both to existing tax systems and to key empirical studies. The Economics of Taxation offers a thorough discussion of the consequences of taxes on economic decisions and equilibrium outcomes, as well as useful insights into how policy makers should design taxes. It covers such issues of central policy importance as taxation of income from capital, environmental taxation, and tax credits for low-income families. This second edition has been significantly revised and updated. Changes include a substantially rewritten chapter on direct taxation; a discussion of recent research in the chapter on mixed taxation; the replacement of the chapter on capital taxation with a chapter on the "new dynamic public finance"; and considerations of environmental taxation in both theory and policy chapters. The book is aimed at graduate students or advanced undergraduates taking public finance classes as well as economists who want to learn more about the topic. It combines discussion of theory, empirical work, and policy objectives in compact form. Appendixes provide necessary background material on consumer and producer theory and the theory of optimal control.
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Contents (pg. v)
Foreword (pg. ix)
Introduction (pg. 1)
Some History (pg. 2)
Current Tax Systems (pg. 5)
Overview of the Book (pg. 8)
References (pg. 11)
I. The Effects of Taxation (pg. 13)
Chapter 1. Distortions and Welfare Losses (pg. 15)
1.1 The Effects of Taxation (pg. 17)
1.2 Welfare Losses (pg. 33)
Conclusion (pg. 38)
References (pg. 39)
Chapter 2. Tax Incidence (pg. 41)
2.1 Partial Equilibrium (pg. 43)
2.2 General Equilibrium (pg. 49)
References (pg. 61)
II. Optimal Taxation (pg. 63)
Chapter 3. Indirect Taxation (pg. 67)
3.1 Ramsey’s Formula (pg. 67)
3.2 Productive Efficiency (pg. 77)
References (pg. 80)
Chapter 4. Direct Taxation (pg. 83)
4.1 The Emergence of the Model (pg. 83)
4.2 Mirrlees’s Model (pg. 87)
4.3 Generalizations (pg. 107)
4.4 Simulations (pg. 115)
References (pg. 121)
Chapter 5. Mixed Taxation (pg. 123)
5.1 The Negative Income Tax (pg. 124)
5.2 Is Indirect Taxation Useful? (pg. 125)
5.3 Criticisms (pg. 129)
References (pg. 132)
Chapter 6. Risk and Time (pg. 133)
6.1 Taxing Savings in a Riskless Economy (pg. 135)
6.2 A Stochastic Economy (pg. 137)
6.3 The Inverse Euler Condition (pg. 139)
6.4 Discouraging Savings (pg. 142)
6.5 Optimal Taxes (pg. 144)
Conclusion (pg. 150)
References (pg. 151)
Chapter 7. Corrective Taxes (pg. 153)
7.1 Pigovian Taxation in Partial Equilibrium (pg. 154)
7.2 Optimal Green Taxes (pg. 156)
7.3 Is There a Double Dividend? (pg. 161)
References (pg. 162)
Chapter 8. Criticisms of Optimal Taxation (pg. 165)
8.1 Representing Social Preferences (pg. 165)
8.2 Putting Tax Theory to Work (pg. 172)
References (pg. 177)
III. Some Current Debates (pg. 179)
Chapter 9. Low-Income Support (pg. 181)
9.1 Measuring Poverty (pg. 182)
9.2 The Main Benefits (pg. 183)
9.3 The Lessons from Theory (pg. 188)
9.4 Empirical Evaluations (pg. 197)
9.5 Recent Reforms (pg. 199)
References (pg. 201)
Chapter 10. Taxation and Global Warming (pg. 203)
10.1 The Optimal Price of Carbon (pg. 205)
10.2 International Issues (pg. 213)
10.3 The Dynamics of Carbon Taxation (pg. 215)
References (pg. 217)
IV. Appendixes (pg. 219)
A. Some Basic Microeconomics (pg. 221)
A.1 Consumer Theory (pg. 221)
A.2 Producer Theory (pg. 224)
References (pg. 227)
B. Optimal Control (pg. 229)
Reference (pg. 231)
Index (pg. 233)

Bernard Salanié

Bernard Salanié is Professor of Economics at Columbia University. Formerly Director of CREST (Paris), he has taught at Ecole Polytechnique, Stanford University, the University of Chicago, and the Toulouse School of Economics. Salanié is the author of Microeconomics of Market Failures (2000) and The Economics of Contracts: A Primer (second edition, 2005), both published by the MIT Press.

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