Saying Too Little, Too Late: Public Finance Textbooks and the Excess Burdens of Taxation

Published on Jan 1, 2014in Econ Journal Watch0.60
Cecil E. Bohanon6
Estimated H-index: 6
John B. Horowitz7
Estimated H-index: 7
James E. McClure7
Estimated H-index: 7
Taxation has several significant excess burdens, including enforcement costs, compliance costs, and deadweight losses. Most estimates find that raising a dollar of tax revenue costs much more than a dollar. Unfortunately, commonly used public finance textbooks do not integrate these costs into discussions of public goods or cost-benefit analyses. Not including these costs means that the optimal levels of public goods will be overestimated. Textbooks say too little, too late about the excess burdens of taxation. They could easily introduce excess burdens early, represent them in public goods diagrams, and integrate them throughout public finance instruction.
  • References (30)
  • Citations (5)
#1Bev Dahlby (MIT: Massachusetts Institute of Technology)H-Index: 17
#1Jonathan Gruber (MIT: Massachusetts Institute of Technology)H-Index: 68
#2Emmanuel Saez (Harvard University)H-Index: 55
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