A concise and rigorous text that combines theory, empirical work, and policy discussion to present core issues in the economics of taxation.
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.
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.
The theory of taxation is often dense with technical detail, making it easy to lose sight of the key results. In this book, Bernard Salanié has once again distilled the essential insights of tax theory in the elegant, intuitive, and precise fashion that is his hallmark. This edition covers much new ground, providing a nice treatment of recent work on dynamic models and several new applications. It will be an essential reference for students of tax policy.
Raj Chetty, Professor of Economics, Harvard University
In this new edition, Bernard Salanié provides a concise yet comprehensive review of the fundamentals of the economics of taxation. Covering recent theoretical developments and at the same time offering a fresh discussion of important policy issues, the book offers a broad and up-to-date perspective.
Alan J. Auerbach, Robert D. Burch Professor of Economics and Law, University of California, Berkeley