《The Economics Of Public Finance Third Edition》

Chapter ⅠINTRODUCTION：PUBLIC FINANCE IN ITS ECONOMIC AND POLITICAL SETTING1

THE NATURE OF THE STUDY OF PUBLIC FINANCE1

Public Finance3

The Questions of Public Finance3

Method5

GOVERNMENT FINANCE AND BUSINESS FINANCE5

GOVERNMENT STRUCTURE IN THE UNITED STATES7

Powers of Federal and State Governments8

THE FEDERAL TAXING POWER12

RECOMMENDED READINGS14

Chapter 2FISCAL ADMINISTRATION15

THE BUDGET15

Preparation of the Budget17

Legislation of the Budget：Appropriations18

Revenue Measures19

The Federal＂Legis-lative Budget，＂19

PROBLEMS OF THE BUDGET22

Measurement of Administrative Efficiency22

Difficulties with Budget Projections23

Control of Annual Expenditures25

General vs．Specific Appropria-tions29

Allotment of Appropriated Funds30

Dedication of Revenues to Special Funds30

WHEN IS A BUDGET BALANCED？33

Balance an Accounting Concept33

Definitions of Basic Concepts34

MULTIPLE BUDGETS36

Ordinary and Emergency Budgets36

Ordinary and Capital Budgets37

OTHER AGENCIES OF FISCAL ADMINISTRATION38

The Treasury38

The Comptroller39

The Banks40

Appendix to Chapter 2ALTERNATIVE MEASUREMENTS OF FISCAL OPERATIONS：THE CONVENTIONAL BUDGET，THE CASH BUDGET，AND THE NATIONAL INCOME ACCOUNTS41

The＂Conventional Budget，＂41

The＂Cash Budget，＂42

Governmental Receipts and Expenditures in the National Income Accounts46

RECOMMENDED READINGS47

Chapter 3PUBLIC EXPENDITURES：TRENDS AND THEIR SIGNIFICANCE48

EXPENDITURE TRENDS48

INTENSIVE EXPANSION OF GOVERNMENTAL FUNCTIONS53

Defense Expenditures54

Highways55

Education57

Urbanization60

EXTENSIVE EXPANSION OF GOVERNMENTAL FUNCTIONS62

Depression-Born Functions62

Relief Programs65

ATTITUDES TOWARD INCREASING PUBLIC EXPENDITURES68

CONTROL OF PUBLIC EXPENDITURES71

Tax Rate Limitation72

Debt Limitation73

Pay-As-You-Go75

GRANTS-IN-AID77

PUBLIC EXPENDI-TURES AND ECONOMIC CONDITIONS80

RECOMMENDED READINGS82

Chapter 4FISCAL POLICY AND THE LEVEL OF ECONOMIC ACTIVITY84

MEASUREMENT OF AGGREGATE ECONOMIC ACTIVITY84

DETERMINANTS OF THE RATE OF ECONOMIC ACTIVITY85

Behavior of Private Consumption Expenditures89

Behavior of Private Investment91

INCOME-INDUCING EFFECTS OF FISCAL POLICY96

Income-Inducing Effects of Government Expenditure97

Income-Inducing Effects of Combined Taxing and Spending99

Income-Creating Effects of a Balanced Budget101

Effect of an Unbalanced Budget upon Income103

CONCLUSION109

RECOMMENDED READINGS110

Chapter 5GOVERNMENT EXPENDITURE AND ECONOMIC INSTABILITY111

ECONOMIC＂STAGNATION，＂116

COMPENSATORY SPENDING IN THE CYCLE117

Case Ⅰ：Anticipations Falling118

Case Ⅱ：Anticipations Rising120

CONDITIONS OF BUSINESS CONFIDENCE121

COMPEN-SATORY SPENDING IN A STAGNANT ECONOMY125

COMPENSATORY POLICY SINCE WOBLD WAR Ⅱ126

RECOMMENDED READINGS130

Chapter 6FISCAL PROGRAMS TO PROMOTE STABILITY132

POLICIES TO STIMULATE AGGREGATE DEMAND AND EMPLOYMENT133

Expenditure Programs133

Tax Reduction139

POLICIES TO LIMIT AGGREGATE DEMAND142

Expenditure Reduction143

Tax Increases144

EXPENDITURE VARIATIONS VS．TAX VARIATIONS148

AUTOMATIC COMPENSATORY MEASURES151

RECOMMENDED READINGS156

Chapter 7ALLOCATION OF RESOURCES BETWEEN THE PUBLIC AND PRIVATE SECTORS OF THE ECONOMY157

THE NATURE OF PUBLIC GOODS AND SERVICES161

THE＂BUDGET PRINCIPLE，＂166

PUBLIC EXPENDITURES AND ECONOMIC GROWTH168

ARE BUDGETARY OBJECTIVES CONSISTENT WITH EACH OTHER？172

RECOMMENDED READINGS176

Chapter 8PUBLIC DEBT：ITS NATURE AND ITS MANAGEMENT178

GROSS DEBT AND NET DEBT178

THE TREND OF GOVERNMENT DEBT182

Federal182

State and Local184

COMPOSITION OF THE FEDERAL DEBT185

Interest-Bearing and Non-Interest-Bearing Debt186

Public and Special Issues190

Maturities191

RETIREMENT OF DEBT193

Refunding193

Conversion194

The Sinking Fund196

CONTINGENT LIABILITIES OF THE FEDERAL GOVERNMENT197

STATE AND LOCAL DEBT199

Default202

PROBLEMS OF DEBT MANAGEMENT202

RECOMMENDED READINGS206

Chapter 9PUBLIC DEBT AND THE MONEY SUPPLY207

MONETIZATION OF THE PUBLIC DEBT：CURRENCY EXPANSION209

MONETIZATION OF THE PUBLIC DEBT：CREDIT EXPANSION210

Mechan-ics of Credit Expansion211

Supply and Use of Member Bank Reserve Funds213

Credit Expansion in World War Ⅰ217

Credit Expansion in World War Ⅱ219

Credit Expansion Following World War Ⅱ and the Treasury-Federal Reserve Controversy223

Public Debt Monetiza-tion；Summary227

RECOMMENDED READINGS229

Chapter 10THE BURDEN OF DEBT230

THE OBVERSE OF DEBT：CREDIT230

THE BENEFITS OF PUBLIC DEBT232

THE BURDEN OF THE DEBT AS BELATED TO ITS PRINCIPAL234

THE BURDEN OF INTEREST PAYMENTS236

MINIMIZING THE DEBT BURDEN238

Borrowing vs．Taxation for Debt Service238

Dispersion of Debt Ownership239

National Income and Debt Burden240

Reduction of Debt Burden by Manipulation241

BORROWING AND THE COST OF WAR241

Postponement of War Costs242

Distribution of War Costs242

CONCLUSIONS CONCERNING PUBLIC DEBT BURDENS245

RECOMMENDED READINGS247

Chapter 11PUBLIC REVENUES：GRANTS，GIFTS，AND ADMINISTRATIVE REVENUES248

CLASSIFICATION OF REVENUE RECEIPTS248

1．Grants and Gifts249

2．Administrative Revenues250

3．Commercial Revenues251

4．Taxes252

GRANTS AND GIFTS254

ADMINISTRATIVE REVENUES255

Fees，Licenses，and Permits257

Fines and Forfeitures258

Escheats259

Special Assessments259

CONCLUSIONS WITH RESPECT TO ADMINISTRATIVE REVENUES261

RECOMMENDED READINGS263

Chapter 12COMMERCIAL REVENUES：GOVERNMENT BUSINESS ENTERPRISES264

NATURE OF COMMERCIAL REVENUES264

REASONS FOR GOVERNMENT OPERATION OF COMMERCIAL ENTERPRISES265

Ineffectiveness of Regulation in the Public Interest265

Unwillingness of Private Capital to Assume Risk267

Sales of Government Surplus Goods269

BUSINESS ENTERPRISES OF THE FEDERAL GOVERNMENT271

BUSINESS ENTER-PRISES OF STATE GOVERNMENTS274

BUSINESS ENTERPRISES OF LOCAL GOVERNMENTS275

DETERMINATION OF PUBLIC PRICES277

RECOMMENDED READINGS280

Chapter 13TAXES：ALLOCATION OF TAX BURDENS282

REVENUE IMPORTANCE OF TAXES283

OBJECTIVES OF TAXATION284

ALLOCATION OF TAX BURDENS287

Two Fundamental Considerations287

Possible Bases of Tax-Burden Allocation288

Cost and Benefit290

Ability to Pay292

Sacrifices and the Rate of Taxation293

The Case for Progressive Taxation296

DISTRIBUTION OF BURDEN IN SUMPTUARY TAXATION301

SUMMARY302

RECOMMENDED READ-INGS303

Chapter 14TAX INCIDENCE AND OTHER EFFECTS305

THE MEANING OF＂INCIDENCE，＂305

THE CONDITIONS OF TAX SHIFTING306

The Role of Price in Tax Shifting306

Forward and Backward Shifting307

GENERAL ANALYSIS OF TAX SHIFTING AND INCIDENGE312

Ⅰ．Taxes Imposed on Net Income312

Ⅱ．Taxes Imposed on Property Ownership317

Ⅲ．Taxes on the Production or Sale of Goods318

OTHER INFLUENCES UPON TAX SHIFTING324

OTHER EFFECTS OF TAXES326

Effects Created in the Process of Shifting327

Effects Resulting from Incidence327

CONCLUDING OBSERVATIONS ON SHIFTING AND INCIDENCE328

RECOMMENDED READINGS329

Chapter 15PROPERTY TAXATION331

STEPS IN ADMINISTRATION OF THE PROPERTY TAX332

Assessment332

Equalization338

Apportionment340

Collection341

THEORY OF THE GENERAL PROPERTY TAX341

Ability，Benefit，and the Incidence of Property Taxes343

Theory of Taxation of Intangibles344

CLASSIFIED PROPERTY TAXES346

TAXATION OF THE＂UNEARNED INCRE-MENT＂FROM LAND349

COUNTER-CYCLE USE OF PROPERTY TAXES351

THE PROPERTY TAX：CONCLUSION352

RECOMMENDED READINGS354

Chapter 16PERSONAL INCOME TAXATION356

REVENUE IMPORTANCE OF PERSONAL INCOME TAXES356

EARLY HISTORY OF FEDERAL PERSONAL INCOME TAXATION358

The Civil War Income Tax358

The Income Tax of 1894359

The Corporation Tax of 1909 and the Sixteenth Amendment360

OUTLINE OF FEDERAL INCOME TAX COMPUTATION361

1．Adjusted Gross Income362

2．Deductions from Adjusted Gross Income362

3．Taxable Income364

4．Application of Tax Rates364

5．Credits Against the Tax369

COVERAGE OF THE FEDERAL PERSONAL INCOME TAx370

COLLECTION AT THE SOURCE372

STATE PERSONAL INCOME TAXES379

RECOMMENDED READINGS382

Chapter 17THE NATURE OF NET INCOME FOR TAX PURPOSES384

WHAT IS AN INDIVIDUAL INCOME？387

THE INCOME PERIOD FOR TAX PURPOSES388

EXCLUSION OF CAPITAL ITEMS FROM INCOME391

CAPITAL GAINS AND LOSSES394

Nature of Capital Gains and Losses394

Survey of Federal Treatment of Capital Gains and Losses396

Are Capital Gains Income？400

Common Objections to Capital Gains Taxation401

IMPROVEMENT IN TAXATION OF CAPITAL GAINS AND LOSSES406

RECOMMENDED READINGS408

Chapter 18TAXATION OF PERSONAL INCOME FROM BUSINESS CORPORATIONS409

THE FEDERAL CORPORATION NET INCOME TAX409

RELATION OF PERSONAL TO CORPORATE INCOME TAXATION411

The History of Integration and Dis-Integration414

Possible Methods of Eliminating Both Double Taxation and the Undistributed Earnings Loophole420

RECOMMENDED READINGS426

Chapter 19STRENGTHENING THE PERSONAL INCOME TAX427

INCOME TAX CHANGES TO PROMOTE UNIFORMITY AND EQUITY429

1．Exclusions from Adjusted Gross Income429

2．Deductions431

3．Exemptions434

4．Tax Credits435

THE EFFECT OF PROPOSED CHANGES UPON THE TAX BASE435

TAX RATES437

COUNTERCYCLE ADJUSTMENTS IN THE PERSONAL INCOME TAX444

RECOMMENDED READINGS446

Chapter 20TAXES ON SALES447

TYPES OF TAXES ON SALES447

Customs Duties447

Taxes on the Production，Sale，or Use of Particular Goods448

Turnover Taxes451

Retail Sales Taxes452

EXTENT OF EXCISE AND SALES TAXATION453

The Federal Government453

State Governments455

Local Governments459

SHIFTING OF TAXES ON SALES460

Limitations upon Forward Shifting461

Legal Aids to Shifting463

THE CASE FOR THE SALES TAX464

1．Stability of Revenues465

2．Cost of Collection466

3．Regressiveness of Sales Taxes467

4．Sumptuary Possibilities468

5．Immediate Revenues468

6．Tax-Consciousness469

COMPENSATORY POSSIBILITIES IN THE SALES TAX469

Unintended Economic Effects469

Commodity Taxes as Intentional Compensatory Instruments471

RECOMMENDED READINGS475

Chapter 21DEATH AND GIFT TAXES476

THEORIES OF DEATH TAXATION477

1．Benefit477

2．State Partnership477

3．The Back-Tax Theory478

4．Ability to Pay478

5．Redistribution of Wealth482

INCIDENCE OF DEATH TAXES485

RECENT HISTORY OF DEATH TAXATION486

The Federal Credit for State Death Taxes Paid487

REVENUE PRODUCTIVITY OF DEATH TAXES490

GIFT TAXES492

INTEGRATION OF DEATH AND GIFT TAXES494

THE PROBLEM OF SITUS IN STATE DEATH TAXATION495

COMPENSATORY USE OF DEATH TAXES497

RECOMMENDED READINGS497

Chapter 22BUSINESS TAXES499

THE NATURE OF BUSINESS TAXES499

The National Tax Association＇s＂Model Tax Systems，＂499

More Recent Theories of the Business Tax501

TYPES OF STATE BUSINESS TAXES504

Business Taxes on Net Income505

＂Business＂Taxes on Gross Income505

Capital Stock Taxes506

Taxation of Special Types of Business507

Productivity of State Business Taxes507

FEDERAL BUSINESS TAXES508

The Federal Corporation Income Tax508

The Federal Excess Profits Tax510

Evaluation of Excess Profits Tax Experience in World War Ⅱ516

The Excess Profits Tax of 1950517

INCIDENCE OF BUSINESS TAXES519

INCIDENCE AND THE RATIONALE OF BUSINESS TAXATION521

RECOMMENDED READINGS523

Chapter 23TAXES ON EMPLOYMENT AND MISCELLANEOUS TAXES524

TAXES ON EMPLOYMENT524

The Old Age and Survivors＇Insurance Taxes524

Unemployment Compensation Taxes526

Incidence of Social Security Taxes on Employment528

Social Security Taxes in the Revenue System534

COUNTER-CYCLE SOCIAL SECURITY TAXATION535

POLL AND CAPITATION TAXES537

THE UNJUST ENRICHMENT TAX539

RECOMMENDED READINGS542

Chapter 24STATE AND LOCAL FINANCE IN THE NATIONAL ECONOMY543

STATE AND LOCAL GOVERNMENTAL RELATIONSHIPS545

FISCAL PROBLEMS OF LOCAL GOVERNMENTS546

Promotion of Efficiency546

Lowering of Service Standards549

Increasing Revenues552

FISCAL PROBLEMS OF STATE COVERNMENTS556

Expensive Functions of State Governments556

POSSIBLE SOLUTIONS TO THE STATE-LOCAL FISCAL＂CRISIS，＂558

Solutions Available to State and Local Governments562

STATE-LOCAL FINANCE AND ECONOMIC STABILITY577

RECOMMENDED READINGS582

INDEX585