Landsburg and Rothbard notes
Landsburg's Perfect Tax
In Fair Play, Landsburg offers some interesting thoughts on
tax equity and efficiency.
Almost all taxation is based on actual earnings, but to avoid
disincentives, you must base it on potential ea
Minimum Winning Coalitions notes
Division of Powers and Minimum Winning Coalitions
In the standard median voter model, whoever wins the
election imposes its will.
In the U.S. and many other systems, political outcomes are a
compromise between severa
Concentrated benefits Diffuse Costs notes
Concentrated Benefits, Diffuse Costs, and Asymmetric Information
A more general story that builds on voters' rational ignorance
goes by the name of "concentrated benefits, diffuse costs."
Simple idea: Specia
Normative Optimal Taxation Versus Positive Optimal Taxation notes
Normative Optimal Taxation Versus Positive Optimal Taxation
In the previous lecture, I pointed out two controversial
inferences many draw from public goods theory:
Laffer Curve and Ramsey Rule notes
The Laffer Curve
The Laffer curve is a simple extension of the basic
economics of taxation: How does revenue depend on tax
rate? It will NOT be linear, because taxes change incentives.
Standard observation: revenue
The Concept of Incidence
The concept of incidence is arguably the most profound one
in economics. Economic shocks (including economic policies)
frequently "ripple out" in counter-intuitive ways, as Bastiat
patiently explains in "What Is
Principal Agent Problem notes
Principal-Agent Problems, Multiple Agents, and Overlapping Principals
We have already thought about simple principal-agent
problems, where there is one principal (a shareholder or voter)
who tries to set good incentives fo
Taxation Incidence and Elasticity notes
Tax Incidence and Elasticity, I: The Suppliers' Viewpoint
The logic of incidence (and the irrelevance of written law) is
easiest to see for excise taxes in simple two-equation S&D
Special Interests and the Median Voter Model notes
Special Interests and the Median Voter Model
The Median Voter Model makes no room for "special
interests." Voters get what they want.
But observers have frequently argued that "special interests"
Public Choice and Money notes
Public Choice and Money
The traditional modeling assumption: market agents maximize
their own utility functions; political agents maximize
a social welfare function.
Implication: Political processes can fail due to l