I Thông tin cơ bản, tư cách và năng lực của khách hàng: Họ và tên khách hàng: Nguyễn Văn X, Lê Thị Y Sinh năm Tên thường gọi: Số CMT: Ngày cấp: Nơi cấp: Nơi cư trú: Thôn (ấp) Xã (phường) Huyện (thị xã) Tỉnh (thành phố) Nghề nghiệp: Công ty TNHH Công nghệ mạng nhỏ ( Smallnet) Giấy chứng nhận quyền sử dụng ruộng đất, mặt nước (số , ngày cấp nơi cấp: Thời hạn hiệu lực còn lại ) Hợp đồng hợp tác có chứng thực của UBND xã, phường, thị trấn cho phép hoạt động (đối với tổ HT), hợp đồng giao khoán, hợp đồng thuê đất, hợp đồng đấu thầu (số ngày ) Giấy phép kinh doanh (hộ kinh doanh), số , ngày cấp nơi cấp: , thời gian hiệu lực còn lại ) Khách hàng có đủ năng lực thực hiện thành công phương án: Có Không Quan hệ tín dụng của khách hàng: Nợ quá hạn trên 6 tháng, nợ khó đòi đối với Ngân hàng: Có Không Địa điểm sản xuất kinh doanh: Khách hàng có đủ tư cách và năng lực vay vốn: Có Không II Tình hình khả năng tài chính của khách hàng: 1 Tình hình sản xuất kinh doanh: Tổng thu: 909.120.000 đồng năm Tổng chi: Chênh lệch thu chi (tổng thu – tổng chi): 2 Tình hình tài sản: 3 Tình hình công nợ: Nợ phải trả đồng Trong đó: + Dư nợ vay của NH đ, Quá hạn: đ + Dư nợ của các TCTD: đ, Quá hạn: đ + Dư nợ của các đối tượng khác đ, Quá hạn: đ
PUBLIC FINANCE AND PUBLIC POLICY PUBLIC FINANCE AND PUBLIC POLICY SIXTH EDITION Jonathan Gruber Massachusetts Institute of Technology Senior Vice President, Content Strategy: Charles Linsmeier Program Director: Shani Fisher Program Manager: Sarah Seymour Executive Development Editor: Sharon Balbos Marketing Manager: Andrew Zierman Marketing Assistant: Chelsea Simens Director of Media Editorial, Social Sciences: Noel Hohnstine Associate Media Editor: Stephany Harrington Assistant Editor: Amanda Gaglione Director of Content Management Enhancement: Tracey Kuehn Senior Managing Editor: Lisa Kinne Senior Content Project Manager: Harold Chester Senior Workflow Project Manager: Jennifer Wetzel Project Managers: Valerie Brandenburg, Matthew Gervais, Lumina Datamatics, Inc Director of Design, Content Management: Diana Blume Design Services Manager: Natasha Wolfe Interior Design: Lumina Datamatics, Inc Cover Design: John Callahan Illustrations: Lumina Datamatics, Inc Illustration Coordinator: Janice Donnola Senior Photo Editor: Sheena Goldstein Production Coordinator: Brianna Lester Media Project Manager: Andrew Vaccaro Composition: Lumina Datamatics, Inc Cover Photo: Nigel Atherton/The Image Bank/Getty Images Library of Congress Control Number: 2018968565 ISBN-13: 978-1-319-20584-3 (mobi) © 2019, 2016, 2013, 2011 by Worth Publishers All rights reserved 1 2 3 4 5 6 24 23 22 21 20 19 Worth Publishers One New York Plaza Suite 4600 New York, NY 10004–1562 www.worthpublishers.com To Andrea, Rachel, Jack, and Ava About the Author Dr Jonathan Gruber is a professor of economics at the Massachusetts Institute of Technology (MIT), where he has taught since 1992 He is also the director of the Health Care Program at the National Bureau of Economic Research, where he is a research associate, and former president of the American Society of Health Economists He is also a member of the Institute of Medicine, the American Academy of Arts and Sciences, and the National Academy of Social Insurance Dr Gruber received his B.S in economics from MIT and his Ph.D in economics from Harvard University Dr Gruber’s research focuses on the areas of public finance and health economics He has published more than 170 research articles, has edited six research volumes, and is the author of Health Care Reform, a graphic novel, and Jump-Starting America (with Simon Johnson) In 2006, he received the American Society of Health Economists Inaugural Medal for the best health economist in the nation aged 40 and under During the 1997–1998 academic year, Dr Gruber was on leave as deputy assistant secretary for economic policy at the Treasury Department From 2003 to 2006, he was a key architect of the ambitious health reform effort in Massachusetts and in 2006 became an inaugural member of the Health Connector Board, the main implementing body for that effort In 2009–2010, he served as a technical consultant to the Obama administration and worked with both the administration and Congress to help craft the Patient Protection and Affordable Care Act In 2011, he was named “One of the Top 25 Most Innovative and Practical Thinkers of Our Time” by the online magazine Slate In both 2006 and 2012, he was rated one of the top 100 most powerful people in health care in the United States by Modern Healthcare magazine BRIEF CONTENTS Contents Preface PART I Introduction and Background Why Study Public Finance? Theoretical Tools of Public Finance Empirical Tools of Public Finance Budget Analysis and Deficit Financing PART II Externalities and Public Goods Externalities: Problems and Solutions Externalities in Action: Environmental and Health Externalities Public Goods Cost-Benefit Analysis Political Economy 10 State and Local Government Expenditures 11 Education PART III Social Insurance and Redistribution 12 Social Insurance: The New Function of Government 13 Social Security 14 Unemployment Insurance, Disability Insurance, and Workers’ Compensation 15 Health Insurance I: Health Economics and Private Health Insurance 16 Health Insurance II: Medicare, Medicaid, and Health Care Reform 17 Income Distribution and Welfare Programs PART IV Taxation in Theory and Practice 18 Taxation: How It Works and What It Means 19 The Equity Implications of Taxation: Tax Incidence 20 Tax Inefficiencies and Their Implications for Optimal Taxation 21 Taxes on Labor Supply 22 Taxes on Savings 23 Taxes on Risk Taking and Wealth 24 Taxation of Business Income 25 Fundamental Tax Reform and Consumption Taxation Glossary References Index The Solution The Problems with Coasian Solutions 5.3 Public-Sector Remedies for Externalities Corrective Taxation Application: Congestion Pricing Subsidies Regulation 5.4 Distinctions Between Price and Quantity Approaches to Addressing Externalities Basic Model Price Regulation (Taxes) Versus Quantity Regulation in This Model Multiple Plants with Different Reduction Costs Uncertainty About Costs of Reduction 5.5 Conclusion Highlights Questions and Problems Advanced Questions Chapter Externalities in Action: Environmental and Health Externalities 6.1 The Role of Economics in Environmental Regulation: The Case of Particulates History of Particulate Regulation Empirical Evidence: Estimating the Adverse Health Effects of Particulates Has the CAA Been a Success? 6.2 Climate Change Application: The Montreal Protocol The Kyoto Treaty Can Trading Make Environmental Agreements More Cost-Effective? Application: Congress Takes On Climate Change and Fails The Paris Agreement and the Future 6.3 The Economics of Smoking The Externalities of Smoking 6.4 The Economics of Other Addictive Behaviors Drinking Empirical Evidence: The Effect of Legal Drinking at Age 21 Illicit Drugs Application: Public Policy Toward Obesity Summary 6.5 Conclusion Highlights Questions and Problems Advanced Questions Chapter Public Goods 7.1 Optimal Provision of Public Goods Optimal Provision of Private Goods Optimal Provision of Public Goods 7.2 Private Provision of Public Goods Private-Sector Underprovision Application: The Free Rider Problem in Practice Can Private Providers Overcome the Free Rider Problem? Application: Business Improvement Districts When Is Private Provision Likely to Overcome the Free Rider Problem? 7.3 Public Provision of Public Goods Empirical Evidence: Measuring Crowd-Out The Right Mix of Public and Private Application: The Good and Bad Sides of Contracting Out Measuring the Costs and Benefits of Public Goods How Can We Measure Preferences for Public Goods? 7.4 Conclusion Highlights Questions and Problems Advanced Questions Appendix to Chapter The Mathematics of Public Goods Provision Chapter Cost-Benefit Analysis 8.1 Measuring the Costs of Public Projects The Example Measuring Current Costs 8.2 Measuring the Benefits of Public Projects Valuing Driving Time Saved Application: The Problems of Contingent Valuation Valuing Saved Lives Empirical Evidence: Valuing Time Savings Application: Valuing Life Empirical Evidence: How Much Does It Cost to Avoid a Traffic Fatality? Discounting Future Benefits Cost-Effectiveness Analysis 8.3 Putting It All Together Other Issues in Cost-Benefit Analysis 8.4 Conclusion Highlights Questions and Problems Advanced Questions Chapter Political Economy 9.1 Unanimous Consent on Public Goods Levels Problems with Lindahl Pricing 9.2 Mechanisms for Aggregating Individual Preferences Application: Direct Democracy in the United States Majority Voting: When It Works Majority Voting: When It Doesn’t Work Arrow’s Impossibility Theorem Restricting Preferences to Solve the Impossibility Problem Median Voter Theory The Potential Inefficiency of the Median Voter Outcome Summary 9.3 Representative Democracy Vote-Maximizing Politicians Represent the Median Voter Assumptions of the Median Voter Model Lobbying Application: Farm Policy in the United States Evidence on the Median Voter Model for Representative Democracy Empirical Evidence: Testing the Median Voter Model Increasing Polarization in American Politics 9.4 Public Choice Theory: The Foundations of Government Failure Size-Maximizing Bureaucracy Leviathan Theory Corruption Application: Government Corruption The Implications of Government Failure Empirical Evidence: Government Failures and Economic Growth 9.5 Conclusion Highlights Questions and Problems Advanced Questions Chapter 10 State and Local Government Expenditures 10.1 Fiscal Federalism in the United States and Abroad Spending and Revenue of State and Local Governments Fiscal Federalism Abroad 10.2 Optimal Fiscal Federalism The Tiebout Model Problems with the Tiebout Model Evidence on the Tiebout Model Optimal Fiscal Federalism Empirical Evidence: Evidence for Capitalization from California’s Proposition 13 10.3 Redistribution Across Communities Should We Care? Application: Barriers to Tiebout and the “Great Divergence” Tools of Redistribution: Grants Redistribution in Action: School Finance Equalization Empirical Evidence: The Flypaper Effect: Here, Gone, and Back Again? Application: School Finance Equalization and Property Tax Limitations in California 10.4 Conclusion Highlights Questions and Problems Advanced Questions Chapter 11 Education 11.1 Why Should the Government Be Involved in Education? Productivity Citizenship Credit Market Failures Failure to Maximize Family Utility Redistribution 11.2 How Is the Government Involved in Education? Free Public Education and Crowding Out Solving the Crowd-Out Problem: Vouchers Problems with Educational Vouchers Vouchers May Increase School Segregation Vouchers May Be an Inefficient and Inequitable Use of Public Resources 11.3 Evidence on Competition in Education Markets Direct Experience with Vouchers Experience with Public School Choice Empirical Evidence: Estimating the Effects of Voucher Programs Experience with Public School Incentives Bottom Line on Vouchers and School Choice 11.4 Measuring the Returns to Education Effects of Education Levels on Productivity Empirical Evidence: Estimating the Return to Education Effects of Education Levels on Other Outcomes The Impact of School Quality Empirical Evidence: Estimating the Effects of School Quality 11.5 The Role of the Government in Higher Education Current Government Role What Is the Market Failure, and How Should It Be Addressed? Application: Addressing Student Loan Debt in the United States 11.6 Conclusion Highlights Questions and Problems Advanced Questions Part III Social Insurance and Redistribution Chapter 12 Social Insurance: The New Function of Government 12.1 What Is Insurance and Why Do Individuals Value It? What Is Insurance? Why Do Individuals Value Insurance? Formalizing This Intuition: Expected Utility Model 12.2 Why Have Social Insurance? Asymmetric Information and Adverse Selection Asymmetric Information Example with Full Information Example with Asymmetric Information The Problem of Adverse Selection Does Asymmetric Information Necessarily Lead to Market Failure? Application: Adverse Selection and Health Insurance “Death Spirals” How Does the Government Address Adverse Selection? 12.3 Other Reasons for Government Intervention in Insurance Markets Externalities Administrative Costs Redistribution Paternalism Application: Flood Insurance and the Samaritan’s Dilemma 12.4 Social Insurance Versus Self-Insurance: How Much Consumption Smoothing? Example: Unemployment Insurance Lessons for Consumption-Smoothing Role of Social Insurance 12.5 The Problem with Insurance: Moral Hazard Application: The Problems with Assessing Workers’ Compensation Injuries What Determines Moral Hazard? Moral Hazard Is Multidimensional The Consequences of Moral Hazard 12.6 Putting It All Together: Optimal Social Insurance 12.7 Conclusion Highlights Questions and Problems Advanced Questions Appendix to Chapter 12 Mathematical Models of Expected Utility Chapter 13 Social Security 13.1 What Is Social Security, and How Does It Work? Program Details Application: Why Choose 35 Years? How Does Social Security Work over Time? Application: Ida May Fuller How Does Social Security Redistribute in Practice? 13.2 Consumption-Smoothing Benefits of Social Security Rationales for Social Security Does Social Security Smooth Consumption? Empirical Evidence: Measuring the CrowdOut Effect of Social Security on Savings 13.3 Social Security and Retirement Theory Evidence Application: Implicit Social Security Taxes and Retirement Behavior Implications 13.4 Social Security Reform Reform Round I: The Greenspan Commission Application: The Social Security Trust Fund and National Savings Incremental Reforms Application: Early Entitlements: Liquidity Versus Behavioral Biases Fundamental Reform: Privatization Application: Company Stock in 401(k) Plans Application: Mixed Proposals for Social Security Reform 13.5 Conclusion Highlights Questions and Problems Advanced Questions Chapter 14 Unemployment Insurance, Disability Insurance, and Workers’ Compensation 14.1 Institutional Features of Unemployment Insurance, Disability Insurance, and Workers’ Compensation Institutional Features of Unemployment Insurance Institutional Features of Disability Insurance Institutional Features of Workers’ Compensation Comparison of the Features of UI, DI, and WC Application: The Duration of Social Insurance Benefits Around the World 14.2 Consumption-Smoothing Benefits of Social Insurance Programs 14.3 Moral Hazard Effects of Social Insurance Programs Moral Hazard Effects of Unemployment Insurance Empirical Evidence: Moral Hazard Effects of Unemployment Insurance Evidence for Moral Hazard in DI Empirical Evidence: Disability Insurance Screening and Labor Supply Evidence for Moral Hazard in WC Empirical Evidence: Moral Hazard Effects of Workers’ Compensation 14.4 The Costs and Benefits of Social Insurance to Firms The Effects of Partial Experience Rating in UI on Layoffs The “Benefits” of Partial Experience Rating Application: The “Cash Cow” of Partial Experience Rating Workers’ Compensation and Firms 14.5 Implications for Program Reform Benefits Generosity Targeting Experience Rating Worker Self-Insurance? Application: Reforming UI 14.6 Conclusion Highlights Questions and Problems Advanced Questions Appendix to Chapter 14 Advanced Quasi-Experimental Analysis Chapter 15 Health Insurance I: Health Economics and Private Health Insurance 15.1 An Overview of Health Care in the United States Application: Finding the Inefficiency in U.S Health Care How Health Insurance Works: The Basics Private Insurance Medicare Medicaid TRICARE/CHAMPVA The Uninsured Empirical Evidence: Health Insurance and Mobility 15.2 How Generous Should Insurance Be to Patients? Consumption-Smoothing Benefits of Health Insurance for Patients Moral Hazard Costs of Health Insurance for Patients How Elastic Is the Demand for Medical Care? The RAND Health Insurance Experiment Empirical Evidence: Estimating the Elasticity of Demand for Medical Care Optimal Health Insurance Application: Health Savings Accounts 15.3 How Generous Should Insurance Be to Medical Providers? Managed Care and Prospective Reimbursement The Impacts of Managed Care How Should Providers Be Reimbursed? 15.4 Conclusion Highlights Questions and Problems Advanced Questions Chapter 16 Health Insurance II: Medicare, Medicaid, and Health Care Reform 16.1 The Medicaid Program for Low-Income Families How Medicaid Works Who Is Eligible for Medicaid? What Health Services Does Medicaid Cover? How Do Providers Get Paid? 16.2 What Are the Benefits of the Medicaid Program? Does Medicaid Provide Financial Protection? Does Medicaid Improve Health? How Does Medicaid Affect Health? Evidence Empirical Evidence: Using State Medicaid Expansions to Estimate Program Effects 16.3 The Medicare Program How Medicare Works Application: The Medicare Prescription Drug Debate 16.4 What Are the Effects of the Medicare Program? The Prospective Payment System Problems with PPS Empirical Evidence: Short Stays in LongTerm Care Hospitals Lesson: The Difficulty of Partial Reform Medicare Managed Care Should Medicare Move to a Full-Choice Plan? Premium Support Application: A Premium Support System for Medicare Gaps in Medicare Coverage 16.5 Long-Term Care Financing Long-Term Care 16.6 Health Care Reform and the ACA The Historical Impasse The Massachusetts Experiment with Incremental Universalism The Affordable Care Act Application: Rising Health Care Costs and Cost Control Efforts in the ACA Early Evidence on the Effects of the ACA The ACA Runs into Trouble 16.7 Conclusion Highlights Questions and Problems Advanced Questions Chapter 17 Income Distribution and Welfare Programs 17.1 Facts on Income Distribution in the United States Relative Income Inequality Absolute Deprivation and Poverty Rates Application: Problems in Poverty Line Measurement What Matters—Relative or Absolute Deprivation? 17.2 Welfare Policy in the United States Cash Welfare Programs In-Kind Programs 17.3 The Moral Hazard Costs of Welfare Policy Moral Hazard Effects of a Means-Tested Transfer System Solving Moral Hazard by Lowering the Benefit Reduction Rate The “Iron Triangle” of Redistributive Programs 17.4 Reducing the Moral Hazard of Welfare Moving to Categorical Welfare Payments Using “Ordeal Mechanisms” Application: An Example of Ordeal Mechanisms Increasing Outside Options Empirical Evidence: The Canadian Self- Sufficiency Project Empirical Evidence: Child Care, Preschool, and Child Outcomes Application: Evaluating the 1996 Welfare Reform 17.5 Universal Basic Income? Empirical Evidence: The Alaska Permanent Fund Dividend and Labor Supply 17.6 Conclusion Highlights Questions and Problems Advanced Questions Part IV Taxation in Theory and Practice Chapter 18 Taxation: How It Works and What It Means 18.1 Types of Taxation Taxes on Earnings Taxes on Individual Income Taxes on Corporate Income Taxes on Wealth Taxes on Consumption Taxation Around the World 18.2 Structure of the Individual Income Tax in the United States Computing the Tax Base Tax Rates and Taxes Paid 18.3 Measuring the Fairness of Tax Systems Average and Marginal Tax Rates Vertical and Horizontal Equity Measuring Vertical Equity Application: The Political Process of Measuring Tax Fairness 18.4 Defining the Income Tax Base The Haig-Simons Comprehensive Income Definition Deviations due to Ability-to-Pay Considerations Deviations due to Costs of Earning Income Application: What Are Appropriate Business Deductions? 18.5 Externality/Public Goods Rationales for Deviating from Haig-Simons Charitable Giving Spending Crowd-Out Versus Tax Subsidy Crowd-In Consumer Sovereignty Versus Imperfect Information Housing Empirical Evidence: The Social Benefits of Homeownership Tax Deductions Versus Tax Credits Application: The Refundability Debate Bottom Line: Tax Expenditures Application: A Tax Break for Olympians? 18.6 The Appropriate Unit of Taxation The Problem of the “Marriage Tax” Marriage Taxes in Practice 18.7 Conclusion Highlights Questions and Problems Advanced Questions Chapter 19 The Equity Implications of Taxation: Tax Incidence 19.1 The Three Rules of Tax Incidence The Statutory Burden of a Tax Does Not Describe Who Really Bears the Tax The Side of the Market on Which the Tax Is Imposed Is Irrelevant to the Distribution of the Tax Burdens Parties with Inelastic Supply or Demand Bear Taxes; Parties with Elastic Supply or Demand Avoid Them Reminder: Tax Incidence Is About Prices, Not Quantities 19.2 Tax Incidence Extensions Tax Incidence in Factor Markets Tax Incidence in Imperfectly Competitive Markets 19.3 General Equilibrium Tax Incidence Effects of a Restaurant Tax: A General Equilibrium Example Issues to Consider in General Equilibrium Incidence Analysis 19.4 The Incidence of Taxation in the United States Empirical Evidence: The Incidence of Taxation: Real-World Complications CBO/TPC Incidence Assumptions Results of CBO/TPC Incidence Analysis Current Versus Lifetime Income Incidence 19.5 Conclusion Highlights Questions and Problems Advanced Questions Appendix to Chapter 19 The Mathematics of Tax Incidence Chapter 20 Tax Inefficiencies and Their Implications for Optimal Taxation 20.1 Taxation and Economic Efficiency Graphical Approach Elasticities Determine Tax Inefficiency Empirical Evidence: The Window Tax Application: Tax Avoidance in Practice Determinants of Deadweight Loss Deadweight Loss and the Design of Efficient Tax Systems Application: Misperceived Taxes 20.2 Optimal Commodity Taxation Ramsey Taxation: The Theory of Optimal Commodity Taxation Inverse Elasticity Rule Equity Implications of the Ramsey Model Application: Price Reform in Pakistan 20.3 Optimal Income Taxes A Simple Example General Model with Behavioral Effects An Example 20.4 Tax-Benefit Linkages and the Financing of Social Insurance Programs The Model Issues Raised by Tax-Benefit Linkage Analysis Empirical Evidence: A Group-Specific Employer Mandate 20.5 Conclusion Highlights Questions and Problems Advanced Questions Appendix to Chapter 20 The Mathematics of Optimal Taxation Chapter 21 Taxes on Labor Supply 21.1 Taxation and Labor Supply—Theory Basic Theory Limitations of the Theory: Constraints on Hours Worked and Overtime Pay Rules 21.2 Taxation and Labor Supply—Evidence Limitations of Existing Studies Empirical Evidence: Estimating the Elasticity of Labor Supply 21.3 Tax Policy to Promote Labor Supply: The Earned Income Tax Credit Background on the EITC Impact of EITC on Labor Supply: Theory Impact of EITC on Labor Supply: Evidence Empirical Evidence: The Effect of the EITC on Single-Mother Labor Supply Summary of the Evidence Application: EITC Reform 21.4 The Tax Treatment of Child Care and Its Impact on Labor Supply The Tax Treatment of Child Care Empirical Evidence: The Effect of Child Care Costs on Maternal Labor Supply Options for Resolving Tax Wedges Comparing the Options 21.5 Conclusion Highlights Questions and Problems Advanced Questions Chapter 22 Taxes on Savings 22.1 Taxation and Savings—Theory and Evidence Traditional Theory Evidence: How Does the After-Tax Interest Rate Affect Savings? Inflation and the Taxation of Savings 22.2 Alternative Models of Savings Precautionary Savings Models Self-Control Models Empirical Evidence: Social Insurance and Personal Savings 22.3 Tax Incentives for Retirement Savings Available Tax Subsidies for Retirement Savings Theoretical Effects of Tax-Subsidized Retirement Savings Application: The Roth IRA Implications of Alternative Models Private Versus National Savings Evidence on Tax Incentives and Savings Empirical Evidence: Estimating the Impact of Tax Incentives for Savings on Savings Behavior 22.4 Conclusion Highlights Questions and Problems Advanced Questions Chapter 23 Taxes on Risk Taking and Wealth 23.1 Taxation and Risk Taking Basic Financial Investment Model Real-World Complications Evidence on Taxation and Risk Taking Labor Investment Applications 23.2 Capital Gains Taxation Current Tax Treatment of Capital Gains What Are the Arguments for Tax Preferences for Capital Gains? What Are the Arguments Against Tax Preferences for Capital Gains? Application: Capital Gains Taxation of “Carried Interest” 23.3 Transfer Taxation Why Tax Wealth? Arguments for the Estate Tax Arguments Against the Estate Tax 23.4 Property Taxation Who Bears the Property Tax? Types of Property Taxation Application: Property Tax Breaks to Businesses 23.5 Conclusion Highlights Questions and Problems Advanced Questions Chapter 24 Taxation of Business Income 24.1 What Are Corporations, and Why Do We Tax Them? Ownership Versus Control Firm Financing Why Do We Have a Corporate Tax? 24.2 The Structure of the Corporate Tax Revenues Expenses Application: What Is Economic Depreciation? The Case of Personal Computers Corporate Tax Rate Tax Credits 24.3 The Incidence of the Corporate Tax Empirical Evidence: Corporate Taxation and Wages 24.4 The Consequences of the Corporate Tax for Investment Theoretical Analysis of Corporate Tax and Investment Decisions Negative Effective Tax Rates Policy Implications of the Impact of the Corporate Tax on Investment Empirical Evidence: Accelerated Depreciation and Investment 24.5 Treatment of International Corporate Income How to Tax International Income Application: The A(pple) B(urger King) C(aterpillar)s of Avoiding Corporate Taxes on International Income Global Versus Territorial Taxation Application: The 2017 Tax Reform and Corporate Tax Wedges 24.6 The Consequences of the Corporate Tax for Financing The Impact of Taxes on Financing Why Not All Debt? Empirical Evidence: How Do Corporate Taxes Affect a Firm’s Financial Structure? The Dividend Paradox How Should Dividends Be Taxed? Application: The 2003 Dividend Tax Cut Corporate Tax Integration 24.7 Conclusion Highlights Questions and Problems Advanced Questions Chapter 25 Fundamental Tax Reform and Consumption Taxation 25.1 Why Fundamental Tax Reform? Improving Tax Compliance Application: Tax Evasion Empirical Evidence: What Determines Tax Compliance? Application: The 1997 IRS Hearings and Their Fallout for Tax Collection Making the Tax Code Simpler Improving Tax Efficiency Summary: The Benefits of Fundamental Tax Reform 25.2 The Politics and Economics of Tax Reform Political Pressures for a Complicated Tax Code Economic Pressures Against Broadening the Tax Base Application: Grandfathering in Virginia The Conundrum Application: TRA 86 and Tax Shelters 25.3 Consumption Taxation Why Might Consumption Make a Better Tax Base? Why Might Consumption Be a Worse Tax Base? Designing a Consumption Tax Backing into Consumption Taxation: CashFlow Taxation 25.4 The Flat Tax Advantages of a Flat Tax Problems with the Flat Tax 25.5 Conclusion Highlights Questions and Problems Advanced Questions Notes Glossary References Index Backcover ... PUBLIC FINANCE AND PUBLIC POLICY PUBLIC FINANCE AND PUBLIC POLICY SIXTH EDITION Jonathan Gruber Massachusetts Institute of Technology Senior... Why Study Public Finance? 1.1 The Four Questions of Public Finance 1.2 Why Study Public Finance? Facts on Government in the United States and Around the World 1.3 The Questions of Public Finance. .. Background Why Study Public Finance? Theoretical Tools of Public Finance Empirical Tools of Public Finance Budget Analysis and Deficit Financing PART II Externalities and Public Goods Externalities: