United States Taxes and Tax Policy

United States Taxes and Tax Policy supplements and complements the theoretical material on taxes found in public finance texts using a combination of institutional, theoretical and empirical information. By adding flesh to theoretical bones, this textbook provides insight into the behaviour of individuals in both the private and public sectors. Specifically, the economic effects of taxes and tax policy are stressed and, as a result, students will gain an appreciation and understanding of how tax policy actually affects the economy. For example, where many texts typically stop with a rather pristine treatment of the income and substitution effects of a tax, this book goes further by examining econometric studies of the supply of labour, and the relationship of this work to taxes, the Laffer curve, and the role and magnitude of the underground economy. Using this approach, Professor Davies brings life to what can be a dull subject. Cover......Page 1 Frontmatter......Page 2 Contents......Page 8 Preface......Page 12 1 - Economic foundations of U.S. tax policy......Page 16 The decline of Keynesian economics......Page 17 The modern neoclassical view of tax policy......Page 20 Current tax policy......Page 21 Modern neoclassical models......Page 27 Role of modern neoclassical models......Page 31 Principles of sound taxation......Page 32 Avoidance, evasion, and tax effectiveness......Page 34 Historical background......Page 36 Anatomy of the income tax......Page 41 Additional problems of the income tax......Page 49 Bracket creep......Page 62 Indexing......Page 70 Tax cuts and tax effects......Page 73 Conclusion......Page 90 Equity issues......Page 92 Efficiency, savings, and economic growth......Page 97 Implementation of the tax......Page 102 Summary......Page 104 Nature of capital gains......Page 106 Brief history......Page 107 Problems of capital gains taxation......Page 109 Conclusion and summary......Page 132 Introduction......Page 134 Shifting and incidence......Page 140 Further economic effects of the tax......Page 146 Double taxation and corporate tax integration......Page 147 The anatomy of investment incentives......Page 153 Introduction......Page 165 Economic effects of inflation......Page 169 Alleviation of inflation-induced taxation......Page 178 Summary and conclusion......Page 181 Early history......Page 183 Mechanics of the tax......Page 185 The financing problem......Page 186 Pay-as-you-go financing......Page 189 Social security and the redistribution of income......Page 190 The long run under alternative assumptions......Page 191 Some economic effects of social security......Page 195 Proposals to alter the system......Page 201 Proposals for fundamental reform......Page 203 Congressional attempts to save social security......Page 208 Major provisions of the 1983 law......Page 209 Summary......Page 212 Characteristics of the VAT......Page 214 VAT proposals in the United States......Page 222 Summary and conclusion......Page 229 Introduction......Page 231 Structure and characteristics of the sales tax......Page 233 Evaluation of the sales tax......Page 239 Proposals for reform of the sales tax......Page 241 Reasons for growth in state--local taxes......Page 243 Features of state--local taxes......Page 245 Sources of state revenue......Page 249 The property tax......Page 265 The incidence of the property tax......Page 269 Economic effects......Page 273 Other sources of local revenue......Page 280 User costs and fees......Page 282 Conclusion......Page 285 Statistical and theoretical problems of tax incidence studies......Page 286 Empirical results of research on tax incidence......Page 289 Prospects for reform......Page 299 Appendix......Page 302 References......Page 307 Index......Page 325 This book outlines recent developments and ideas about taxes, tax policy and theory in the United States