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• About this Book
• Cover Page
• Half Title Page
• Title Page
• Copyright Page
• Dedication
• About the Authors
• Brief Contents
• Contents
• From the Author
• What’s New in this Edition
• Presentation and Pedagogy
• Instructor Resources
• Acknowledgments
• Accessibility
• Chapter 1: Why Study Public Finance?
• 1.1 The Four Questions of Public Finance
• When Should the Government Intervene in the Economy?
• How Might the Government Intervene?
• What Is the Effect of Those Interventions on Economic Outcomes?
• Why Do Governments Choose to Intervene in the Way That They Do?
• 1.2 Why Study Public Finance? Facts on Government in the United States and Around the World
• The Size and Growth of Government
• Decentralization
• Spending, Taxes, Deficits, and Debts
• Distribution of Spending
• Distribution of Spending
• Regulatory Role of the Government
• 1.3 The Questions of Public Finance Are Front and Center During Covid-19
• When Should the Government Intervene?
• How Should the Government Intervene?
• What Are the Effects of Interventions?
• Why Governments Do What They Do
• 1.4 Conclusion
• End of Chapter
• Highlights
• Questions and Problems
• Advanced Questions
• Chapter 2: Theoretical Tools of Public Finance
• 2.1 Constrained Utility Maximization
• Preferences and Indifference Curves
• Utility Mapping of Preferences
• Budget Constraints
• Putting It All Together: Constrained Choice
• The Effects of Price Changes: Substitution and Income Effects
• 2.2 Putting the Tools to Work: TANF and Labor Supply Among Single Parents
• Identifying the Budget Constraint
• The Effect of TANF on the Budget Constraint
• 2.3 Equilibrium and Social Welfare
• Demand Curves
• Supply Curves
• Equilibrium
• Social Efficiency
• Competitive Equilibrium Maximizes Social Efficiency
• From Social Efficiency to Social Welfare: The Role of Equity
• Choosing an Equity Criterion
• 2.4 Welfare Implications of Benefit Reductions: The TANF Example Continued
• 2.5 Conclusion
• End of Chapter
• Highlights
• Questions and Problems
• Advanced Questions
• Appendix to Chapter 2: The Mathematics of Utility Maximization
• Chapter 3: Empirical Tools of Public Finance
• 3.1 The Important Distinction Between Correlation and Causality
• The Problem
• 3.2 Measuring Causation with Data We’d Like to Have: Randomized Trials
• Randomized Trials as a Solution
• The Problem of Bias
• Randomized Trials of ERT
• Randomized Trials in the TANF Context
• Why We Need to Go Beyond Randomized Trials
• 3.3 Estimating Causation with Data We Actually Get: Observational Data
• Time Series Analysis
• Cross-Sectional Regression Analysis
• Quasi-Experiments
• Structural Modeling
• 3.4 Conclusion
• End of Chapter
• Highlights
• Questions and Problems
• Advanced Questions
• Appendix to Chapter 3: Cross-Sectional Regression Analysis
• Chapter 4: Budget Analysis and Deficit Financing
• 4.1 Government Budgeting
• The Budget Deficit in Recent Years
• The Budget Process
• State and International Deficit Rules
• 4.2 Measuring the Budgetary Position of the Government: Alternative Approaches
• Real Versus Nominal
• Economic Conditions
• Cash Versus Capital Accounting
• Static Versus Dynamic Scoring
• 4.3 Do Current Debts and Deficits Mean Anything? A Long-Run Perspective
• Background: Present Discounted Value
• Why Current Labels May Be Meaningless
• Measuring Long-Run Government Budgets
• What Does the U.S. Government Do?
• 4.4 Why Do We Care About the Government’s Fiscal Position?
• Short-Run Versus Long-Run Effects of the Government on the Macroeconomy
• Background: Savings and Economic Growth
• The Federal Budget, Interest Rates, and Economic Growth
• 4.5 Conclusion
• End of Chapter
• Highlights
• Questions and Problems
• Advanced Questions
• Chapter 5: Externalities: Problems and Solutions
• 5.1 Externality Theory
• Economics of Negative Production Externalities
• Negative Consumption Externalities
• Positive Externalities
• 5.2 Private-Sector Solutions to Negative Externalities
• The Solution
• The Problems with Coasian Solutions
• 5.3 Public-Sector Remedies for Externalities
• Corrective Taxation
• Subsidies
• Regulation
• 5.4 Distinctions Between Price and Quantity Approaches to Addressing Externalities
• Basic Model
• Price Regulation (Taxes) Versus Quantity Regulation in This Model
• Multiple Plants with Different Reduction Costs
• Uncertainty About Costs of Reduction
• 5.5 Conclusion
• End of Chapter
• Highlights
• Questions and Problems
• Advanced Questions
• Chapter 6: Externalities in Action: Environmental and Health Externalities
• 6.1 The Role of Economics in Environmental Regulation: The Case of Particulates
• History of Particulate Regulation
• Has the CAA Been a Success?
• 6.2 Climate Change
• The Kyoto Treaty
• Can Trading Make Environmental Agreements More Cost-Effective?
• The Paris Agreement and the Future
• 6.3 The Economics of Cigarette Smoking
• The Externalities of Cigarette Smoking
• 6.4 The Economics of Other Externality-Creating Behaviors
• Alcohol Use
• Illicit Drugs
• Summary
• 6.5 Conclusion
• End of Chapter
• Highlights
• Questions and Problems
• Advanced Questions
• Chapter 7: Public Goods
• 7.1 Optimal Provision of Public Goods
• Optimal Provision of Private Goods
• Optimal Provision of Public Goods
• 7.2 Private Provision of Public Goods
• Private-Sector Underprovision
• Can Private Providers Overcome the Free Rider Problem?
• When Is Private Provision Likely to Overcome the Free Rider Problem?
• 7.3 Public Provision of Public Goods
• The Right Mix of Public and Private
• Measuring the Costs and Benefits of Public Goods
• How Can We Measure Preferences for Public Goods?
• 7.4 Conclusion
• End of Chapter
• Highlights
• Questions and Problems
• Advanced Questions
• Appendix to Chapter 7: The Mathematics of Public Goods Provision
• Chapter 8: Cost-Benefit Analysis
• 8.1 Measuring the Costs of Public Projects
• The Example
• Measuring Current Costs
• 8.2 Measuring the Benefits of Public Projects
• Valuing Driving Time Saved
• Valuing Saved Lives
• Discounting Future Benefits
• Cost-Effectiveness Analysis
• 8.3 Putting It All Together
• Other Issues in Cost-Benefit Analysis
• 8.4 Conclusion
• End of Chapter
• Highlights
• Questions and Problems
• Advanced Questions
• Chapter 9: Political Economy
• 9.1 Unanimous Consent on Public Goods Levels
• Lindahl Pricing
• Problems with Lindahl Pricing
• 9.2 Mechanisms for Aggregating Individual Preferences
• Majority Voting: When It Works
• Majority Voting: When It Doesn’t Work
• Arrow’s Impossibility Theorem
• Restricting Preferences to Solve the Impossibility Problem
• Median Voter Theory
• The Potential Inefficiency of the Median Voter Outcome
• Summary
• 9.3 Representative Democracy
• Vote-Maximizing Politicians Represent the Median Voter
• Assumptions of the Median Voter Model
• Lobbying
• Evidence on the Median Voter Model for Representative Democracy
• Increasing Polarization in American Politics
• 9.4 Public Choice Theory: The Foundations of Government Failure
• Size-Maximizing Bureaucracy
• Leviathan Theory
• Corruption
• The Implications of Government Failure
• 9.5 Conclusion
• End of Chapter
• Highlights
• Questions and Problems
• Advanced Questions
• Chapter 10: State and Local Government Expenditures
• 10.1 Fiscal Federalism in the United States and Abroad
• Spending and Revenue of State and Local Governments
• Fiscal Federalism Abroad
• 10.2 Optimal Fiscal Federalism
• The Tiebout Hypothesis
• Problems with the Tiebout Model
• Evidence on the Tiebout Model
• Optimal Fiscal Federalism
• 10.3 Redistribution Across Communities
• Should We Care?
• Tools of Redistribution: Grants
• Redistribution in Action: School Finance Equalization
• 10.4 Conclusion
• End of Chapter
• Highlights
• Questions and Problems
• Advanced Questions
• Chapter 11: Education
• 11.1 Why Should the Government Be Involved in Education?
• Productivity
• Citizenship
• Credit Market Failures
• Failure to Maximize Family Utility
• Redistribution
• 11.2 How Is the Government Involved in Education?
• Free Public Education and Crowding Out
• Solving the Crowd-Out Problem: Vouchers
• Problems with Educational Vouchers
• 11.3 Evidence on Competition in Education Markets
• Direct Experience with Vouchers
• Experience with Public School Choice
• Experience with Public School Incentives
• Bottom Line on Vouchers and School Choice
• 11.4 Measuring the Returns to Education
• Effects of Education Levels on Productivity
• Effects of Education Levels on Other Outcomes
• The Impact of School Quality
• 11.5 The Role of the Government in Higher Education
• Current Government Role
• What Is the Market Failure, and How Should It Be Addressed?
• 11.6 Conclusion
• End of Chapter
• Highlights
• Questions and Problems
• Advanced Questions
• Chapter 12: Social Insurance: The New Function of Government
• 12.1 What Is Insurance and Why Do Individuals Value It?
• What Is Insurance?
• Why Do Individuals Value Insurance?
• Formalizing This Intuition: Expected Utility Model
• 12.2 Why Have Social Insurance? Asymmetric Information and Adverse Selection
• Asymmetric Information
• Example with Perfect Information
• Example with Asymmetric Information
• The Problem of Adverse Selection
• Does Asymmetric Information Necessarily Lead to Market Failure?
• How Does the Government Address Adverse Selection?
• 12.3 Other Reasons for Government Intervention in Insurance Markets
• Externalities
• Administrative Costs
• Redistribution
• Paternalism
• 12.4 Social Insurance Versus Self-Insurance: How Much Consumption Smoothing?
• Example: Unemployment Insurance
• Lessons for Consumption-Smoothing Role of Social Insurance
• 12.5 The Problem with Insurance: Moral Hazard
• What Determines Moral Hazard?
• Moral Hazard Is Multidimensional
• The Consequences of Moral Hazard
• 12.6 Putting It All Together: Optimal Social Insurance
• 12.7 Conclusion
• End of Chapter
• Highlights
• Questions and Problems
• Advanced Questions
• Appendix to Chapter 12: Mathematical Models of Expected Utility
• Chapter 13: Social Security
• 13.1 What Is Social Security, and How Does It Work?
• Program Details
• How Does Social Security Work over Time?
• How Does Social Security Redistribute in Practice?
• 13.2 Consumption-Smoothing Benefits of Social Security
• Rationales for Social Security
• Does Social Security Smooth Consumption?
• 13.3 Social Security and Retirement
• Theory
• Evidence
• Implications
• 13.4 Social Security Reform
• Reform First Steps: The Greenspan Commission
• Potential Next Steps: Incremental Reforms
• Fundamental Reform: Privatization
• 13.5 Conclusion
• End of Chapter
• Highlights
• Questions and Problems
• Advanced Questions
• Chapter 14: Unemployment Insurance, Disability Insurance, and Workers’ Compensation
• 14.1 Institutional Features of Unemployment Insurance, Disability Insurance, and Workers’ Compensation
• Institutional Features of Unemployment Insurance
• Institutional Features of Disability Insurance
• Institutional Features of Workers’ Compensation
• Comparison of the Features of UI, DI, and WC
• 14.2 Consumption-Smoothing Benefits of Social Insurance Programs
• 14.3 Moral Hazard Effects of Social Insurance Programs
• Moral Hazard Effects of Unemployment Insurance
• Evidence for Moral Hazard in DI
• Evidence for Moral Hazard in WC
• 14.4 The Costs and Benefits of Social Insurance to Firms
• The Effects of Partial Experience Rating in UI on Layoffs
• The “Benefits” of Partial Experience Rating
• Workers’ Compensation and Firms
• 14.5 Implications for Program Reform
• Benefits Generosity
• Targeting
• Worker Self-Insurance?
• 14.6 Conclusion
• End of Chapter
• Highlights
• Questions and Problems
• Advanced Questions
• Appendix to Chapter 14: Advanced Quasi-Experimental Analysis
• Chapter 15: Health Insurance I: Health Economics and Private Health Insurance
• 15.1 An Overview of Health Care in the United States
• How Health Insurance Works: The Basics
• Private Insurance
• Medicare
• Medicaid
• TRICARE/CHAMPVA
• The Uninsured
• 15.2 How Generous Should Insurance Be to Patients?
• Consumption-Smoothing Benefits of Health Insurance for Patients
• Moral Hazard Costs of Health Insurance for Patients
• How Elastic Is the Demand for Medical Care? The RAND Health Insurance Experiment
• Optimal Health Insurance
• 15.3 How Generous Should Insurance Be to Medical Providers?
• Managed Care and Prospective Reimbursement
• The Impacts of Managed Care
• How Should Providers Be Reimbursed?
• 15.4 Conclusion
• End of Chapter
• Highlights
• Questions and Problems
• Advanced Questions
• Chapter 16: Health Insurance II: Medicare, Medicaid, and Health Care Reform
• 16.1 The Medicaid Program for Low-Income Families
• How Medicaid Works
• Who Is Eligible for Medicaid?
• What Health Services Does Medicaid Cover?
• How Do Providers Get Paid?
• 16.2 What Are the Benefits of the Medicaid Program?
• Does Medicaid Provide Financial Protection?
• Does Medicaid Improve Health?
• How Does Medicaid Affect Health? Evidence
• 16.3 The Medicare Program
• How Medicare Works
• 16.4 Controlling Costs in the Medicare Program
• The Prospective Payment System
• Problems with PPS
• Lesson: The Difficulty of Partial Reform
• Medicare Managed Care
• Should Medicare Move to a Full-Choice Plan? Premium Support
• Gaps in Medicare Coverage
• 16.5 Long-Term Care
• Financing Long-Term Care
• 16.6 Health Care Reform and the ACA
• The Historical Impasse
• The Massachusetts Experiment with Incremental Universalism
• The Affordable Care Act
• Early Evidence on the Effects of the ACA
• The ACA Runs into Trouble
• What Does the Future Hold?
• 16.7 Conclusion
• End of Chapter
• Highlights
• Questions and Problems
• Advanced Questions
• Chapter 17: Income Inequality and Government Transfer Programs
• 17.1 Facts on Income Distribution in the United States
• Relative Income Inequality
• Absolute Deprivation and Poverty Rates
• What Matters—Relative or Absolute Deprivation?
• 17.2 Transfer Policy in the United States
• Cash Transfer Programs
• In-Kind Programs
• 17.3 The Moral Hazard Costs of Transfer Policy
• Moral Hazard Effects of a Means-Tested Transfer System
• Solving Moral Hazard by Lowering the Benefit Reduction Rate
• The “Iron Triangle” of Redistributive Programs
• 17.4 Reducing the Moral Hazard of Transfers
• Moving to Categorical Transfer Payments
• Using In-Kind Benefits
• Increasing Outside Options
• 17.5 Universal Basic Income?
• 17.6 Conclusion
• End of Chapter
• Highlights
• Questions and Problems
• Advanced Questions
• Chapter 18: Taxation: How It Works and What It Means
• 18.1 Types of Taxation
• Taxes on Earnings
• Taxes on Individual Income
• Taxes on Corporate Income
• Taxes on Wealth
• Taxes on Consumption
• Taxation Around the World
• 18.2 Structure of the Individual Income Tax in the United States
• Computing the Tax Base
• Tax Rates and Taxes Paid
• 18.3 Measuring the Fairness of Tax Systems
• Average and Marginal Tax Rates
• Vertical and Horizontal Equity
• Measuring Vertical Equity
• 18.4 Defining the Income Tax Base
• The Haig-Simons Comprehensive Income Definition
• Deviations Due to Ability-to-Pay Considerations
• Deviations Due to Costs of Earning Income
• 18.5 Externality/Public Goods Rationales for Deviating from Haig-Simons
• Charitable Giving
• Spending Crowd-Out Versus Tax Subsidy Crowd-In
• Consumer Sovereignty Versus Imperfect Information
• Housing
• Tax Deductions Versus Tax Credits
• Bottom Line: Tax Expenditures
• 18.6 The Appropriate Unit of Taxation
• The Problem of the “Marriage Tax”
• Marriage Taxes in Practice
• 18.7 Conclusion
• End of Chapter
• Highlights
• Questions and Problems
• Advanced Questions
• Chapter 19: The Equity Implications of Taxation: Tax Incidence
• 19.1 The Three Rules of Tax Incidence
• Rule 1: The Statutory Burden of a Tax Does Not Describe Who Really Bears the Tax
• Rule 2: The Side of the Market on Which the Tax Is Imposed Is Irrelevant to the Distribution of the Tax Burdens
• Rule 3: Parties with Inelastic Supply or Demand Bear Taxes; Parties with Elastic Supply or Demand Avoid Them
• Reminder: Tax Incidence Is About Prices, Not Quantities
• Reminder: Balanced Budget Tax Incidence
• 19.2 Example: Tax Incidence in Factor Markets
• 19.3 General Equilibrium Tax Incidence
• Effects of a Restaurant Tax: A General Equilibrium Example
• Issues to Consider in General Equilibrium Incidence Analysis
• 19.4 The Incidence of Taxation in the United States
• TPC Incidence Assumptions
• Results of TPC Incidence Analysis
• Current Versus Lifetime Income Incidence
• 19.5 Conclusion
• End of Chapter
• Highlights
• Questions and Problems
• Advanced Questions
• Appendix to Chapter 19: The Mathematics of Tax Incidence
• Chapter 20: Tax Inefficiencies and Their Implications for Optimal Taxation
• 20.1 Taxation and Economic Efficiency
• Graphical Approach
• Elasticities Determine Tax Inefficiency
• Determinants of Deadweight Loss
• Deadweight Loss and the Design of Efficient Tax Systems
• 20.2 Optimal Commodity Taxation
• Ramsey Taxation: The Theory of Optimal Commodity Taxation
• Inverse Elasticity Rule
• Equity Implications of the Ramsey Model
• 20.3 Optimal Income Taxes
• A Simple Example
• General Model with Behavioral Effects
• An Example
• 20.4 Tax-Benefit Linkages and the Financing of Social Insurance Programs
• The Model
• Issues Raised by Tax-Benefit Linkage Analysis
• 20.5 Conclusion
• End of Chapter
• Highlights
• Questions and Problems
• Advanced Questions
• Appendix to Chapter 20: The Mathematics of Optimal Taxation
• Chapter 21: Taxes on Labor Supply
• 21.1 Taxation and Labor Supply—Theory
• Basic Theory
• Limitations of the Theory: Constraints on Hours Worked and Overtime Pay Rules
• 21.2 Taxation and Labor Supply—Evidence
• Limitations of Existing Studies
• 21.3 Tax Policy to Promote Labor Supply: The Earned Income Tax Credit
• Background on the EITC
• Impact of EITC on Labor Supply: Theory
• Impact of EITC on Labor Supply: Evidence14
• Summary of the Evidence
• 21.4 The Tax Treatment of Child Care and Its Impact on Labor Supply
• The Tax Treatment of Child Care
• Options for Resolving Tax Wedges
• Comparing the Options
• 21.5 Conclusion
• End of Chapter
• Highlights
• Questions and Problems
• Advanced Questions
• Chapter 22: Taxes on Savings
• 22.1 Taxation and Savings—Theory and Evidence
• Traditional Theory
• Evidence: How Does the After-Tax Interest Rate Affect Savings?
• Inflation and the Taxation of Savings
• 22.2 Alternative Models of Savings
• Precautionary Savings Models
• Self-Control Models
• 22.3 Tax Incentives for Retirement Savings
• Available Tax Subsidies for Retirement Savings
• Theoretical Effects of Tax-Subsidized Retirement Savings
• Implications of Alternative Models
• Private Versus National Savings
• Evidence on Tax Incentives and Savings
• 22.4 Conclusion
• End of Chapter
• Highlights
• Questions and Problems
• Advanced Questions
• Chapter 23: Taxes on Risk Taking and Wealth
• 23.1 Taxation and Risk Taking
• Basic Financial Investment Model
• Real-World Complications
• Evidence on Taxation and Risk Taking
• Labor Investment Applications
• 23.2 Capital Gains Taxation
• Current Tax Treatment of Capital Gains
• What Are the Arguments for Tax Preferences for Capital Gains?
• What Are the Arguments Against Tax Preferences for Capital Gains?
• 23.3 Transfer Taxation
• Why Tax Wealth? Arguments for the Estate Tax
• Arguments Against the Estate Tax
• 23.4 Property Taxation
• Who Bears the Property Tax?
• Types of Property Taxation
• 23.5 Conclusion
• End of Chapter
• Highlights
• Questions and Problems
• Advanced Questions
• Chapter 24: Taxation of Business Income
• 24.1 What Are Corporations, and Why Do We Tax Them?
• Ownership Versus Control
• Firm Financing
• Why Do We Have a Corporate Tax?
• 24.2 The Structure of the Corporate Tax
• Revenues
• Expenses
• Corporate Tax Rate
• Tax Credits
• 24.3 The Incidence of the Corporate Tax
• 24.4 The Consequences of the Corporate Tax for Investment
• Theoretical Analysis of Corporate Tax and Investment Decisions
• Negative Effective Tax Rates
• Policy Implications of the Impact of the Corporate Tax on Investment
• 24.5 Treatment of International Corporate Income
• How to Tax International Income
• Global Versus Territorial Taxation
• 24.6 The Consequences of the Corporate Tax for Financing
• The Impact of Taxes on Financing
• Why Not All Debt?
• The Dividend Paradox
• How Should Dividends Be Taxed?
• Corporate Tax Integration
• 24.7 Conclusion
• End of Chapter
• Highlights
• Questions and Problems
• Advanced Problems
• Chapter 25: Fundamental Tax Reform and Consumption Taxation
• 25.1 Why Fundamental Tax Reform?
• Improving Tax Compliance
• Making the Tax Code Simpler
• Improving Tax Efficiency
• Summary: The Benefits of Fundamental Tax Reform
• 25.2 The Politics and Economics of Tax Reform
• Political Pressures for a Complicated Tax Code
• Economic Pressures Against Broadening the Tax Base
• The Conundrum
• 25.3 Consumption Taxation
• Why Might Consumption Make a Better Tax Base?
• Why Might Consumption Be a Worse Tax Base?
• Designing a Consumption Tax
• Backing into Consumption Taxation: Cash-Flow Taxation
• 25.4 The Flat Tax
• Advantages of a Flat Tax
• Problems with the Flat Tax
• 25.5 Conclusion
• End of Chapter
• Highlights
• Questions and Problems
• Advanced Questions
• Glossary
• References
• Notes
• Index
• Back Cover
• Extended Descriptions
• FIGURE 1-1 Federal Government Spending.
• FIGURE 1-2 Total Government Spending.
• FIGURE 1-3 Federal versus State or Local Government Spending.
• FIGURE 1-4 Federal Revenues and Expenditures.
• FIGURE 1-5 Debt Levels of O E C D Nations.
• FIGURE 1-6 State and Local Government Receipts, Expenditures, and Surplus.
• FIGURE 1-7 Distribution of Federal and State Expenditures.
• FIGURE 1-8 Distribution of Federal and State Expenditures.
• FIGURE 2-1 Indifference Curves.
• FIGURE 2-2 Indifference Curve Analysis.
• FIGURE 2-3 Diminishing Marginal Utility.
• FIGURE 2-4 Marginal Rates of Substitution.
• FIGURE 2-5 Budget Constraint.
• FIGURE 2-6 Constrained Optimization.
• FIGURE 2-7 Substitution and Income Effects.
• FIGURE 2-8 The Consumption–Leisure Trade-off.
• FIGURE 2-9 Budget Constraint.
• FIGURE 2-10 Utility Maximization.
• FIGURE 2-11 Utility Maximization.
• FIGURE 2-12 Deriving the Demand Curve.
• FIGURE 2-13 Market Outcome.
• FIGURE 2-14 Consumer Surplus.
• FIGURE 2-15 Producer Surplus.
• FIGURE 2-16 Competitive Equilibrium.
• FIGURE 2-17 Welfare Implications.
• FIGURE 3-1 Average Benefit Guarantee.
• FIGURE 3-2 Real Cigarette Prices and Youth Smoking.
• FIGURE 3-3 T A N F Benefits and Labor Supply.
• FIGURE 3-4 T A N F Benefit Income and Labor Supply.
• FIGURE 4-1 Federal Taxes, Spending, and the Deficit.
• FIGURE 4-2 Economic Adjustment.
• FIGURE 4-3 Projected Versus Actual Surplus or Deficit.
• FIGURE 4-4 Capital Market Equilibrium.
• FIGURE 4-5 Worldwide Decline in Real Interest rates.
• FIGURE 5-1 Average Global Temperature.
• FIGURE 5-2 Market Failure due to Negative Production Externalities.
• FIGURE 5-3 Market Failure due to Negative Consumption Externalities.
• FIGURE 5-4 Market Failure due to Positive Production Externality.
• FIGURE 5-5 A Coasian Solution to Negative Production Externalities.
• FIGURE 5-6 Taxation as a Solution to Negative Production Externalities.
• FIGURE 5-7 Subsidies as a Solution to Positive Production Externalities.
• FIGURE 5-8 Market for Pollution Reduction.
• FIGURE 5-9 Pollution Reduction with Multiple Firms.
• FIGURE 5-10 Market for Pollution Reduction.
• FIGURE 6-1 Emissions in Counties
• FIGURE 6-2 Top 25 Fossil Fuel Emitters.
• FIGURE 6-3 Benefits of Trading.
• FIGURE 6-4 U.S. Adults Who Smoke Cigarettes.
• FIGURE 6-5 Changes in Drinking and Mortality
• FIGURE 6-6 Changes in Drinking and Mortality Around Age 21
• FIGURE 7-1 Horizontal Summation.
• FIGURE 7-2 Vertical Summation.
• FIGURE 9-1 Lindahl Pricing.
• TABLE 9-1: Majority voting delivers a consistent outcome.
• Table 9-2: Majority voting doesn’t deliver a consistent outcome.
• FIGURE 9-2 Single-Peaked Versus Non-Single-Peaked Preferences.
• FIGURE 9-3 Vote Maximization.
• FIGURE 9-4 Political Polarization.
• The U S Congress.
• FIGURE 10-1 Changing Fiscal Federalism.
• TABLE 10-1 Comparison of State Spending and Revenue.
• FIGURE 10-2 Education and Private Goods.
• FIGURE 10-3 Impact of a Matching Grant.
• FIGURE 10-4 Impact of an Unconditional Block Grant.
• FIGURE 10-5 Impact of a Conditional Block Grant.
• FIGURE 11-1 Education Spending and Outcomes.
• FIGURE 11-2 Education Spending.
• FIGURE 11-3 Public School Crowd-Out.
• FIGURE 11-4 Government Spending on Higher Education.
• FIGURE 12-1 Government Spending by Function.
• FIGURE 13-1 Social Security Benefits.
• FIGURE 13-2 Elderly poverty and social security.
• FIGURE 13-3 Elderly work and social security.
• FIGURE 13-4 Hazard rate of retirement.
• FIGURE 13-5 Implicit taxes.
• FIGURE 13-6 Ratio of Older Adults to Working-Age Population.
• FIGURE 14-1 Unemployment Benefit Schedule.
• FIGURE 14-2 Duration of U I Benefits.
• FIGURE 14-3 Effect of UI Benefits.
• FIGURE 14-4 Labor force Nonparticipation.
• FIGURE 14-5 D I Benefit Amount.
• FIGURE 14-6 Earnings by age.
• FIGURE 14-7 W C Benefit changes and Injury duration.
• FIGURE 14-8 Experience-Rating Schedule.
• FIGURE 14-9 Unemployment Insurance.
• FIGURE 15-1 Health Care Spending in O E C D Nations.
• FIGURE 15-2 Distribution of National Health Expenditures.
• FIGURE 15-3 Health System Outcomes.
• FIGURE 15-4 Breakdown of Health Care Overspending.
• FIGURE 15-5 Cost of Medical Procedures and Drugs.
• FIGURE 15-6 Cost of Medical Services.
• FIGURE 15-7 Patient-Side Moral Hazard.
• FIGURE 15-8 The flat of the curve.
• FIGURE 15-9 Age Profiles for Outpatient Visits and Inpatient Admissions.
• FIGURE 15-10 Employer-Sponsored Health Insurance.
• FIGURE 16-1 Medicaid.
• FIGURE 16-2 Timing of Hospital Discharges.
• FIGURE 16-3 Medicare beneficiaries.
• FIGURE 16-4 Incorporating H M Os into Medicare
• FIGURE 16-5 Uninsurance for Adults.
• FIGURE 16-6 Decrease in Mortality.
• FIGURE 17-1 Life Expectancies.
• FIGURE 17-2 Aggregate Income.
• FIGURE 17-3 Poverty Rates.
• FIGURE 17-4 Labour Supply Decisions.
• FIGURE 17-5 Labour Supply Decisions.
• FIGURE 17-6 Transfer Benefits and Single Motherhood.
• FIGURE 17-7 Distribution of Formal Care Consumption.
• FIGURE 17-8 Cash Transfer Opportunity Set.
• FIGURE 17-9 Tying Health Insurance to Cash Transfers.
• FIGURE 17-10 Transfer Caseloads.
• FIGURE 17-11 Average Annual Income Growth.
• FIGURE 17-12 Employment Impacts.
• FIGURE 18-1 Government Revenue
• FIGURE 18-2 International Tax Revenues.
• FIGURE 18-3 Federal Income Tax Rate Schedule.
• FIGURE 19-1 Sources of Federal Revenue.
• FIGURE 19-2 Statutory Burdens.
• FIGURE 19-3 Side of the Market.
• FIGURE 19-4 Inelastic Factors.
• FIGURE 19-5 Elastic Factors.
• FIGURE 19-6 Elasticity of Supply.
• FIGURE 19-7 Incidence Analysis.
• FIGURE 19-9 Tax on Bozeman Restaurants.
• FIGURE 19-9 Tax on Bozeman Restaurants.
• FIGURE 19-10 Bozeman Restaurant Tax on Labor Versus Capital.
• FIGURE 20-1 Deadweight Loss of a Tax.
• FIGURE 20-2 Deadweight Loss.
• FIGURE 20-3 Effects of the Window Tax.
• FIGURE 20-4 Effects of the Window Tax.
• FIGURE 20-5 Marginal Deadweight Loss.
• FIGURE 20-6 Preexisting Distortions.
• FIGURE 20-7 Low Rates Imposed on a Broad Base.
• FIGURE 20-8 Consequences of Subsidies and Taxes.
• FIGURE 20-9 The Laffer Curve.
• FIGURE 20-10 Optimal Income Taxation.
• FIGURE 20-11 Tax-Benefit Linkages.
• FIGURE 20-12 Taxation with No Deadweight Loss.
• FIGURE 21-1 Taxation and the Consumption-Leisure Trade-Off.
• FIGURE 21-2 Substitution Versus Income Effect.
• FIGURE 21-3 Distribution of Incomes.
• FIGURE 21-4 Earned Income Tax Credit.
• FIGURE 21-5 Earned Income Tax Credit.
• FIGURE 21-6 E I T C’s Effect on Labor Supply.
• FIGURE 21-7 Changes in the E I T C Structure.
• FIGURE 22-1 Taxation and the Intertemporal Consumption Decision.
• FIGURE 22-2 Intertemporal Substitution Versus Income Effect.
• FIGURE 22-3 Tax Subsidies and the Intertemporal Consumption Trade-Off.
• FIGURE 22-4 I R A’s and the Intertemporal Consumption Decision.
• FIGURE 22-5 Low Savers Versus High Savers.
• FIGURE 22-6 Individual Contributions Above and Below Top Tax Cutoff.
• FIGURE 23-1 Capital Gains Tax Rates and Capital Gains Realizations.
• FIGURE 23-2 Measuring the Response of Capital Gains Realizations to Tax Cuts
• FIGURE 24-1 Sources of Corporate Finance.
• FIGURE 24-2 Investment Decisions with No Corporate Tax.
• FIGURE 24-3 Investment Decision with a Tax on Corporate Income .
• FIGURE 24-4 Investment Decisions with Depreciation and the I T C.
• FIGURE 24-5 The Firm’s Financing Decision.
• FIGURE 25-1 Optimal Tax Evasion.
• FIGURE 25-2 Number of Pages in Individual Tax Return Documents.
• FIGURE 25-3 Optimal Tax Evasion
• FIGURE 25-4 Changes in the Tax Base.
• FIGURE 25-5 Consumption Taxation in OECD Nations.
• Back Cover.