Taxation and Public Spending Efficiency: An International Comparison

Pareto Efficiency in International Taxation

This paper addresses a key but neglected task in the theory of international taxation, lent increased urgency by growing awareness of the potential gains from tax coordination: the characterization of Pareto-efficient international tax regimes. It shows that the Diamond-Mirrlees theorem on the desirability of production efficiency, which underlies the key tenets of policy advice in internationa...

Property taxation and local public spending: the renter effect

The point of departure for this study is the pervasive finding that, other things equal, local jurisdictions tend to spend more on local services the larger the fraction of renters among their residents. This paper seeks to determine the approximate magnitude of this “renter effect” by posing the question “How much smaller would local public budgets be if all residents were home-owners?” Making...

A Dynamic Theory of Public Spending, Taxation, and Debt

This paper presents a dynamic political economy theory of public spending, taxation, and debt. The theory builds on the well-known tax smoothing approach to fiscal policy pioneered by Robert Barro (1979). This approach predicts that governments will use budget surpluses and deficits as a buffer to prevent tax rates from changing too sharply. Thus, governments will run deficits in times of high ...

Taxation and Capital Spending

Schumpeterian Growth with Productive Public Spending and Distortionary Taxation

The latest version of Schumpeterian growth theory eliminates the scale effect by positing a process of development of new product lines that fragments the aggregate market in submarkets whose size does not increase with population. A key feature of this process is the sterilization of the effect of the size of the aggregate market on firms’ incentives to invest in the growth of a given product ...