Public Finance, 2nd Edition

Equity (continued)

limitations, 43±45

overview, 39±40

Equivalized income, Lorenz±Gini tax

incidence, 600

Excise taxes, Pechman±Okner studies,

589±590

Exclusions, Haig±Simons criterion for

personal income, 362±363

Exemption, Haig±Simons criterion for

personal income, 362

Expenditures tax, see also Consumption tax

Haig±Simons income, 344±345, 348±349

Expenditure incidence

decreasing-cost services, 578±579

Samuelsonian nonexclusive goods, 579±585

Hines' beneWt measure, 583±585

transfers, 575±578

Externalities

aggregate production, see also Aggregate

production externalities

antipollution, see also United States

antipollution policy

Arrow±Lind theorem, 764±765

bargaining, 166±167, 225±229, 668±678

Coase theorem, 166±167, 225±229, 668±678

consumption, see also Consumption

externalities

consumption±production, see also

Consumption±production externalities

defensive measures as, 258±259

deWnition, 147

individualized externalities, 156, 170

market failure, pure private good, 163±166

modeling, 148±152

nonexclusive, private information, 676±677

pareto±optimal conditions, pollution

analysis, 238±239

pecuniary, deWnition, 147

policy-relevant, see also Policy-relevant

externalities

private information

market power, 674±676

nonexclusive externalities, 676±677

overview, 668±669, 671±674

production, see also Production

externalities

pure private good, limited externalities,

169±170

second-best analysis, 659±678

technological, deWnition, 147

terminology, 147±148

worst case, 154±157

Federal personal income tax

capital gains, 363±364, 370

loopholes, 364±370

personal income, 362±363

Feldstein, Martin

distribution coeYcient, 467

horizontal, vertical equity principles, 338,

357±358

total and marginal dead-weight loss

estimates, 425±428

First-best analysis

deWnition and overview, 67±71

model dichotomies, 67±71

second-best analysis similarities, 79±80

strengths and weaknesses, 387±388

First-best theory of taxation

charity

cash-equivalent in-kind transfers,

318±319

in-kind versus cash, 315±316

recipient cash preference, 316±318

free-riding, 322±324

mainstream position: overview, 307±309

pareto±optimal redistribution, 320±321

assistance to poor, 313±315

overall distribution of income, 311±313

public assistance versus private giving,

324±326

public choice and pareto±optimal

redistribution, 309±311

redistributive transfer motivations

equal access, 328

public

insurance, 326±327

social status, 327±328

Fiscal federalism

basic questions, 6±7

deWnition, 831

incompatibilities and destructive

competition, 832±833

local autonomy in Wrst-best environment,

840±841

misperceived preferences, 839±840

Oates' decentralization theorem, 837±839

Oates' perfect correspondence, 836±837

optimal, see also Optimal federalism

public sector economics, 6, 25±26

redistribution, Brown±Oates model,

881±883

redistribution, Epple±Romer model,

886±890

redistribution, Lee model, uncertain

incomes, 883±886

social welfare, 833±834

936 INDEX