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 book 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 issues of central policy importance, such as taxation of income from capital, environmental taxation, tax credits for low-income families, and the consumption tax. A knowledge of microeconomics at the advanced undergraduate level is required, but the book contains an appendix with the main results from consumer and producer theory used in the text. Because the study of optimal taxation relies on the theory of optimal control, which is not often taught in economics courses, a second appendix provides the necessary background. Bernard Salanié is Research Fellow of LEI (CREST) in Paris, Professor at École Polytechnique, and Managing Editor of the Review of Economic Studies. His books include The Microeconomics of Market Failures (2000) and The Economics of Taxation (2003), both published by The MIT Press."Salanié deserves great credit for presenting the fundamental theory of taxation and its application in a concise and accessible form. Progressing from the basics of tax incidence, through optimal taxation to current policy debates, this book is suitable for a wide audience ranging from advanced undergraduate to beginning graduate students. I would recommend it without hesitation." --Gareth D. Myles, Professor of Economics, University of Exeter, and Institute for Fiscal Studies "This volume offers an ideal introduction to the theoretical literature on tax design and the economic effects of taxation. It is a perfect starting point for graduate students who are just discovering public finance, and a concise reference for those who have already mastered the basics." --James M. Poterba, Mitsui Professor of Economics, MIT "The Economics of Taxation is a useful and concise guide to the modern economic theory of taxation. It will be especially useful for a graduate course in public economics, because the analytics are both sophisticated and well explained. The book nicely relates the modern theories to current policy debates in the United States and Europe, and thoughtfully discusses what theory can and cannot contribute to thse debates." --Joel Slemrod, Paul W. McCracken Collegiate Professor of Business Economics and Public Policy, University of Michigan View All Endorsements