Direct tax/indirect tax mix, 502±503
Diseconomies, externalities, 147
Distributional policy, Wrst-best analysis, 69±70
Distribution coeYcient, Feldstein, 467
Distribution of income
cost±beneWt analysis, see also Cost±beneWt
analysis, distribution of income
normative public sector economics, 15±17
pareto optimality, 311±313
social mobility, 135±137
Double counting, cost±beneWt analysis, 729,
825
Dynamic tax incidence
Auerbach±KotlikoV OLG model
balanced budget increases, 615
consumer's expectations, 610
consumption, 608
government sector, 608±609
human capital, 618±619
intertemporal redistributions, 611±614
intratemporal redistributions, 616
investment, 617±618
marginal incentives, 611
market environment, 609±610
production, 607±608
public good, 611
saving, 617
tax substitutions, 614±615
temporary deWcits, 615±616
Fullerton±Rogers lifetime CGE model,
619±621
overview, 606±607
Earned income tax credit
cash transfers, 638±639
U-shaped tax schedule, 510±511
Ease of administration
broad-based tax design, 332
taxation theory, 24
Economies, externalities, 147
Economy-wide tax incidence
annual and lifetime incidence, 593±595
annual studies, 587±588
CGE models, see also Computable general
equilibrium models
dynamic tax incidence, see also Dynamic tax
incidence
Lorenz±Gini incidence
Gini coeYcients, 598
horizontal inequity, 600±602
social welfare index of inequality,
598±599
tax concentration curve, 597±598
tax progressivity, 602±603
vertical inequity, 599
Pechman±Okner studies
corporation income taxes, 590±592
local property taxes, 590±592
payroll tax for social security, 589
personal income taxes, 588
sales and excise taxes, 589±590
pure lifetime tax incidence, 595±597
studies overview, 585±586
EYciency
broad-based tax design, 332
cost, personal income tax, 428±429
decreasing cost services, 297±299,
302±304
diVerential, tax incidence welfare measures,
535
government policy, 9
income taxes, 419±422
pareto-optimal conditions, 37±39
redistributional, mobility, 886
EYciency welfare loss, partial equilibrium
analysis, 403
EITC, see also Earned income tax credit
End-results equity, government policy goals,
11±12
Environmental Protection Agency
industrial air pollution, 264±265
toxic substances, 267±268
EPA, see also Environmental Protection
Agency
Epple±Romer model, redistribution,
federalism, 886±890
Equal access, redistributive transfers, 328
Equal
opportunity, process equity, 10
Equal sacriWce, vertical equity, 355±356
Equity
ability-to-pay principle, 334±370
broad-based tax design, 333
decreasing cost services
beneWts-received principle, 300±302
defense contracting, 299±300
overview, 297±299
government policy
end-results equity, 11±12
overview, 9
process equity, 10±11
optimal distribution of income, 39±40
second-best production rules, 709±714
social welfare function
Bergson±Samuelson social welfare
function, 40±43
INDEX 935
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