"The Theory of Taxation and Public Economics" presents a unified conceptual framework for analyzing taxation--the first to be systematically developed in several decades. An original treatment of the subject rather than a textbook synthesis, the book contains new analysis that generates novel results, including some that overturn long-standing conventional wisdom. This fresh approach should change thinking, research, and teaching for decades to come.
Building on the work of James Mirrlees, Anthony Atkinson and Joseph Stiglitz, and subsequent researchers, and in the spirit of classics by A. C. Pigou, William Vickrey, and Richard Musgrave, this book steps back from particular lines of inquiry to consider the field as a whole, including the relationships among different fiscal instruments. Louis Kaplow puts forward a framework that makes it possible to rigorously examine both distributive and distortionary effects of particular policies despite their complex interactions with others. To do so, various reforms--ranging from commodity or estate and gift taxation to regulation and public goods provision--are combined with a distributively offsetting adjustment to the income tax. The resulting distribution-neutral reform package holds much constant while leaving in play the distinctive effects of the policy instrument under consideration. By applying this common methodology to disparate subjects, "The Theory of Taxation and Public Economics" produces significant cross-fertilization and yields solutions to previously intractable problems.
"This is a very ambitious project which has the quality of proposing a unified view of all these topics. Moreover, on the various aspects of taxation, the reader will find an interesting critical survey and a valuable source of information about the literature and the pending questions."--Marc Fleurbaey, Social Choice and Welfare
Preface xviiCHAPTER 1: Introduction 1PART I: FRAMEWORKCHAPTER 2: An Integrated View 13CHAPTER 3: The Social Objective 35PART II: OPTIMAL TAXATIONCHAPTER 4: Optimal Income Taxation 53CHAPTER 5: Elaboration and Extensions 80CHAPTER 6: Income and Commodity Taxation 122PART III: GOVERNMENT EXPENDITURESCHAPTER 7: Transfer Payments 151CHAPTER 8: Goods and Services 179PART IV: ADDITIONAL ASPECTS OF TAXATIONCHAPTER 9: Taxation of Capital 221CHAPTER 10: Taxation of Transfers 249CHAPTER 11: Taxation and Social Security 275CHAPTER 12: Taxation of Families 315PART V: DISTRIBUTIVE JUSTICE AND SOCIAL WELFARECHAPTER 13: Welfare 347CHAPTER 14: Social Welfare Function 370CHAPTER 15: Other Normative Criteria 391CHAPTER 16: Conclusion 407References 417Index 455