Strongly Recommended Texts
Auerbach, A., and M. Feldstein. Handbook of Public Economics. Vol. 3. Amsterdam, North Holland, 2002.
Myles, G. Public Economics. New York: Cambridge University Press, 1995.
Salanie, B. Economics of Taxation. Cambridge: MIT Press, 2002.
Useful References
Atkinson, A., and J. Stiglitz. Lectures in Public Economics. New York: McGraw Hill, 1980.
Auerbach, A., and M. Feldstein. Handbook of Public Economics. Vols. 1 & 2. Amsterdam, North Holland, 1985 & 1987.
Laffont, J. Fundamentals of Public Economics. Cambridge: MIT Press, 1988.
Pechman, J. Federal Tax Policy. 5th ed. Washington: Brookings Institution, 1987.
Stiglitz, J. Economics of the Public Sector. 3rd ed. New York: Norton, 2001.
1. Political Economy and the Role of Government
1.1 Explaining the Scope and Growth of Government:
Aghion, P., A. Alesina, and F. Trebbi. "Endogenous Political Institutions." NBER Working Paper 9006, June 2002.
Ansolabehere, S., J. de Figueiredo, and J. Snyder. "Why is There so Little Money in U.S. Politics?" Journal of Economic Perspectives (forthcoming).
Borcherding, T. "The Causes of Government Expenditure Growth: A Survey of the U.S. Evidence." Journal of Public Economics 28 (1985): 359-382.
Holsey, A., and T. Borcherding. "Why Does Government's Share of National Income Grow? An Assessment of the Recent Literature." In Perspectives on Public Choice. Edited by D. Mueller. Cambridge: Cambridge University Press, 1997.
Peltzman, S. "Voters as Fiscal Conservatives." Quarterly Journal of Economics 107 (1992): 327-362.
Persson, T., G. Roland, and G. Tabellini. "Comparative Politics and Public Finance." Journal of Political Economy 108 (2000): 1121-1161.
Persson, T., and G. Tabellini. "Political Economics and Public Finance." In Handbook of Public Economics. Vol. 3. Edited by A. Auerbach, and M. Feldstein. Amsterdam: North Holland, 2001, pp. 1549-1660.
Shepsle, K., and B. Weingast. "Political Solutions to Market Problems." American Political Science Review 78 (1984): 417-434.
1.2 Voting Models and Public Choice:
Laffont, J. Chapters 4, 5 in Lectures in Public Economics.
Lizzeri, A., and N. Persico. "The Provision of Public Goods Under Alternative Electoral Incentives." American Economic Review 91 (March 2001): 225-239.
Tideman, N., and G. Tullock. "A New and Superior Process for Making Social Choices." Journal of Political Economy 84 (1976): 1145-1159.
1.3 Bureaucrats, Elected Officials, and Public Choice:
Alesina, A., and D. Rodrik. "Distributive Politics and Economic Growth." Quarterly Journal of Economics 109 (May 1994): 465-490.
Auerbach, A. "Budget Windows, Sunsets, and Fiscal Controls." Mimeo, University of California - Berkeley, July 2003.
Banerjee, A. "A Theory of Misgovernance." Quarterly Journal of Eocnomics 112 (November 1997): 1289-1332.
Besley, T., and A. Case. "Political Institutions and Policy Choices: Empirical Evidence from the United States." Journal of Economic Literature 41 (March 2003): 7-73.
Fiorina, M., and R. Noll. "Voters, Bureaucrats, and Legislators: A Rational Choice Perspective on the Growth of Bureaucracy." Journal of Public Economics 9 (1978): 239-55.
Niskanen, W. "Bureaucrats and Politicians." Journal of Law and Economics 18 (1975): 617-643.
Poterba, J. "State Reactions to Fiscal Crises: 'Natural Experiments' for Studying the Effects of Budgetary Institutions." Journal of Political Economy 102 (August 1994): 799-821.
Romer, T., and H. Rosenthal. "Bureaucrats versus Voters: On the Political Economy of Resource Allocation by Direct Democracy." Quarterly Journal of Economics 93 (1979): 563-588.
———. "Median Voters or Budget Maximizers: Evidence from School Expenditure Referenda." Economic Inquiry (1982): 556-578.
Roubini, N., and J. Sachs. "Political and Economic Determinants of Budget Deficits in Industrial Democracies." European Economic Review 33 (1989): 903-933.
Shleifer, A., and R. Vishny. "Corruption." Quarterly Journal of Economics 108 (August 1993): 599-618.
2. Taxation and Labor Supply
2.1 The Measurement of Efficiency Costs of Taxes:
Browning, E. "The Non-Tax Wedge." Journal of Public Economics 53 (1994): 419-434.
Diamond, P., and D. McFadden. "Some Uses of the Expenditure Function in Public Finance." Journal of Public Economics 3 (1974): 3-21.
Goulder, L., and R. Williams. "The Substantial Bias from Ignoring General Equilibrium Effects in Estimating Excess Burden, and a Practical Solution." Journal of Political Economy 111 (August 2003): 898-927.
Hausman, J. "Exact Consumers Surplus and Deadweight Loss." American Economic Review 81 (1981): 622-676.
Hausman, J., and W. Newey. "Nonparametric Measurement of Exact Consumers Surplus and Deadweight Loss." Econometrica 63 (1995): 1445-1476.
2.2 The Theory of Labor Income Taxation:
Akerlof, G. "The Economics of Tagging as Applied to the Optimal Income Tax." American Economic Review 68 (1978): 8-19.
Allen, F. "Optimal Linear Income Taxation with General Equilibrium Effects on Wages." Journal of Public Economics 17 (1982): 135-144.
Atkinson, A. "How Progressive Should Income Tax Be?" In Essays in Modern Economics. Edited by M. Parkin and A. R. Nobay. London: Longmans, 1973, pp. 90-113.
Atkinson, A. Public Economics in Action: The Basic Income/Flat Tax Proposal. Oxford: Clarendon Press, 1995.
Diamond, P. "Optimal Income Taxation: An Example with a U-Shaped Pattern of Optimal Marginal Tax Rates." American Economic Review 88 (March 1998): 83-95.
Helpman, E., and E. Sadka. "The Optimal Linear Income Tax." Journal of Public Economics 9 (1978): 383-393.
Immonen, R., R. Kanbur, M. Keen, and M. Tuomala. "Tagging and Taxing: The Optimal Use of Categorical and Income Information in Designing Tax/Transfer Schemes." Economica 65 (May 1998): 179-192.
Maskin, E., and J. Riley. "Input versus Output Incentive Schemes." Journal of Public Economics 28 (1985): 1-24.
Mirrlees, J. "Exploration in the Theory of Optimal Income Taxation." Review of Economic Studies 38 (April 1971): 175-208.
Saez, E. "Using Elasticities to Derive Optimal Income Tax Rates." Review of Economic Studies 68 (2001): 205-229.
Sheshinski, E. "The Optimal Linear Income Tax." Review of Economic Studies 39 (1972): 297-302.
Slemrod, J., S. Yitzhaki, J. Mayshar, and M. Lundholm. "Optimal Two Bracket Linear Income Taxation." Journal of Public Economics 53 (1994): 269-290.
Stern, N. "Optimum Taxes with Errors in Administration." Journal of Public Economics 17 (1982): 181-211.
———. "On the Specification of Models of Optimum Income Taxation." Journal of Public Economics 6 (1976): 123-162.
Stiglitz, J. "Pareto Efficient and Optimal Taxation and the New New Welfare Economics." In Handbook of Public Economics. Vol. 2. Edited by A. Auerbach, and M. Feldstein. Amsterdam: North Holland, 1987, pp. 991-1041.
2.3 Empirical Analysis of Taxation and Labor Supply by Prime Age Men:
Blomquist, S. "Restrictions in Labor Supply Estimation: Is the MaCurdy Critique Correct?" Economics Letters 47 (March 1995): 229-235.
———. "Estimation Methods for Male Labor Supply Functions: How to Take Account of Nonlinear Taxes." Journal of Econometrics 70 (February 1996): 383-405.
Blomquist, S., M. Eklof, and W. Newey. "Tax Reform Evaluation Using Nonparametric Methods: Sweden 1980-1991." Journal of Public Economics 79 (March 2001): 543-568.
Blundell, R., A. Duncan, and C. Meghir. "Estimating Labor Supply Responses Using Tax Reforms." Econometrica 66 (July 1998): 827-862.
Blundell, R., and T. MaCurdy. "Labor Supply: A Review of Alternative Approaches." In Handbook of Labor Economics. Vol. 3. Edited by A. Ashenfelter and D. Card. Amsterdam: Elsevier, 1999, pp. 1569-1695.
Bosworth, B., and G. Burtless. "Effects of Tax Reform on Labor Supply, Investment, and Saving." Journal of Economic Perspectives 6 (Winter 1992): 3-25.
Eklof, M., and H. Sacklen. "The Hausman-MaCurdy Controversy: Why Do the Results Differ Across Studies?" Journal of Human Resources 35 (1999): 204-220.
Fullerton, D. "Reconciling Recent Estimates of the Marginal Welfare Cost of Taxation." American Economic Review 81 (March 1991): 302-308.
———. "On the Possibility of an Inverse Relationship Between Tax Rates & Government Revenue." Journal of Public Economics 19 (1982): 3-22.
Gokhale, J., L. Kotlikoff, and A. Sluchynsky. "Does it Pay to Work?" NBER Working Paper 9096, 2002.
Hausman, J. "Labor Supply." In How Taxes Affect Economic Behavior. Edited by H. Aaron, and J. Pechman. Washington: Brookings Institution, 1981, pp. 27-83.
Hausman, J., and J. Poterba. "Household Behavior and the Tax Reform Act of 1986." Journal of Economic Perspectives 1 (1987): 101-119.
Heckman, J. "Comment." In Behavioral Simulations in Tax Policy Analysis. Edited by M. Feldstein. Chicago: University of Chicago Press, 1982, pp. 70-82.
Kimmel, J., and T. Kniesner. "New Evidence on Labor Supply: Employment versus Hours Elasticities by Sex and Marital Status." Journal of Monetary Economics 42 (1998): 289-301.
MaCurdy, T. "An Empirical Model of Labor Supply in a Lifecycle Setting." Journal of Political Economy 89 (1981): 1059-1085.
———. "Work Disincentive Effects of Taxes: A Reexamination of Some Evidence." American Economic Review 80 (May 1992): 243-249.
Moffitt, R., and M. Wilhelm. "Taxes and Labor Supply Decisions of the Affluent." In Does Atlas Shrug? The Economic Consequences of Taxing the Rich. Edited by J. Slemrod. New York, Russell Sage Foundation, 2000, pp. 193-234.
Saez, E. "Do Taxpayers Bunch at Kink Points?" NBER Working Paper 7366, 1999.
Showalter, M., and N. Thurston. "Taxes and Labor Supply of High-Income Physicians." Journal of Public Economics 66 (October 1997): 73-98.
Ziliak, J., and T. Kniesner. "Estimating Life Cycle Labor Supply Tax Effects." Journal of Political Economy 107 (April 1999): 326-359.
2.4 Taxation the Labor Supply of Married Women:
Eissa, N. "Taxation and Labor Supply of Married Women: The Tax Reform Act of 1986 as a Natural Experiment." NBER Working Paper 5023, 1995.
Mroz, T. "The Sensitivity of an Empirical Model of Married Women's Hours of Work to Economic and Statistical Assumptions." Econometrica 55 (1987): 765-800.
Triest, R. "The Effect of Income Taxation on Labor Supply in the United States." Journal of Human Resources 25 (Summer 1990): 491-516.
2.5 Tax Rates and Taxable Income:
Aarbu, K., and T. Thoresen. "Income Responses to Tax Changes: Evidence from the Norwegian Tax Reform." National Tax Journal 54 (June 2001): 319-338.
Auerbach, A., and J. Slemrod. "The Economic Effects of the Tax Reform Act of 1986." Journal of Economic Literature 35 (June 1997): 589-632.
Auten, G., and R. Carroll. "The Effect of Income Taxes on Household Income." Review of Economics and Statistics 81 (November 1999): 681-693.
Bianchi, M., B. Gudmundsson, and G. Zoega. "Iceland's Natural Experiment in Supply-Side Economics." American Economic Review 91 (December 2001): 1564-1579.
Feenberg, D., and J. Poterba. "Income Inequality and the Incomes of High Income Taxpayers: Evidence from Tax Returns." In Tax Policy and the Economy 7 (1993): 145-173.
Feldstein, M. "The Effects of Marginal Tax Rates on Taxable Income: A Panel Study of the 1986 Tax Reform." Journal of Political Economy 103 (June 1995): 551-571.
———. "Tax Avoidance and the Deadweight Loss of the Income Tax." Review of Economics and Statistics 81 (November 1999): 674-681.
Goolsbee, A. "Evidence on the High-Income Laffer Curve from Six Decades of Tax Reform." Brookings Papers on Economic Activity 99, no. 2: 1-47.
———. "What Happens When You Tax the Rich? Evidence from Executive Compensation." Journal of Political Economy 108 (April 2000): 352-378.
Gruber, J., and Emmanuel Saez. "The Elasticity of Taxable Income: Evidence and Implications." Journal of Public Economics 84 (April 2002): 1-32.
Lindsey, L. "Individual Taxpayer Response to Tax Cuts, 1982-1984: With Implications for the Revenue Maximizing Tax Rate." Journal of Public Economics 33 (1987): 173-206.
Sillamaa, M., and M. Veall. "The Effect of Marginal Tax Rates on Taxable Income: A Panel Study of the 1988 Tax Flattening in Canada." Journal of Public Economics 80 (2001): 341-356.
Slemrod, J. "Methodological Issues in Measuring and Interpreting Taxable Income Elasticities." National Tax Journal 51 (1998): 773-788.
2.6 The Earned Income Tax Credit: Taxes and Labor Supply at Low Incomes:
Browning, E. "Effects of the Earned Income Tax Credit on Income and Welfare." National Tax Journal 48 (1995): 23-43.
Dickert, S., S. Houser, and J. Scholz. "Taxes and the Poor: A Micro-simulation Study of Implicit and Explicit Taxes." National Tax Journal 47 (1994): 76-97.
Eissa, N., and J. Liebman. "Labor Supply Response to the Earned Income Tax Credit." Quarterly Journal of Economics 111 (May 1996): 605-637.
Eissa, N., and H. Hoynes. "The EITC and Labor Supply of Married Couples." NBER Working Paper 6856, 1998.
Hotz, V., C. Mullin, and J. Scholz. "The Earned Income Tax Credit and Labor Market Participation of Families on Welfare." Mimeo, UCLA Department of Economics, 2002.
Meyer, B., and D. Rosenbaum. "Making Single Mothers Work: Recent Tax and Welfare Policy and Its Effects." National Tax Journal 53 (December 2000, Part 2): 1027-1061.
Saez, E. "Optimal Income Transfer Programs: Intensive vs. Extensive Labor Supply Responses." Quarterly Journal of Economics 117 (August 2002): 1039-1074.
3. Optimal Commodity Taxation
3.1 Basic Theory:
Auerbach, A. "The Theory of Excess Burden and Optimal Taxation." In Handbook of Public Economics, Vol. 1. Edited by M. Feldstein and A. Auerbach. Amsterdam: North Holland, 1985, pp. 61-125.
Auerbach, A., and J. Hines. "Taxation and Economic Efficiency." In Handbook of Public Economics. Vol. 3. Edited by A. Auerbach and M. Feldstein. Amsterdam: Elsevier, 2002, pp. 1348-1421.
Deaton, A. "Econometric Issues in Tax Design for Developing Countries." In The Theory of Taxation in Developing Countries. Edited by D. Newbery and N. Stern. Oxford: Oxford University Press, 1987, pp. 92-113.
Deaton, A., and N. Stern. "Optimally Uniform Commodity Taxes, Taste Differences, and Lump Sum Grants." Economics Letters 20 (1986): 263-266.
Diamond, P. "A Many-Person Ramsey Tax Rule." Journal of Public Economics 4 (1975): 335-342.
Diamond, P., and J. Mirrlees. "Optimal Taxation and Public Production I: Production Efficiency and II: Tax Rules." American Economic Review 61 (1971): 8-27, 261-278.
Dixit, A. "Welfare Effects of Tax and Price Changes." Journal of Public Economics 4 (1975): 103-123.
Myles, G. Public Economics. Chapter 4.
Naito, H. "Re-Examination of Uniform Commodity Taxes Under a Non-Linear Income Tax System and Its Implication for Production Efficiency." Journal of Public Economics 71 (1999): 165-188.
Stern, N. "The Theory of Optimal Commodity and Income Taxation: An Introduction." in The Theory of Taxation in Developing Countries. Edited by D. Newbery and N. Stern. Oxford: Oxford University Press, 1987, pp. 22-59.
Slemrod, J. "Optimal Taxation and Optimal Tax Systems." Journal of Economic Perspectives 4 (Winter 1990): 157-178.
3.2 Taxing "Bads," Optimal Corrective Taxation, and Environmental Policy:
Bailey, E., A. Ellerman, P. Joskow, J. Montero, and R. Schmalensee. Markets for Clean Air: The U.S. Acid Rain Program. Cambridge: Cambridge University Press, 2000.
Barthold, T. "Issues in the Design of Environmental Excise Taxes." Journal of Economic Perspectives 8 (Winter 1994): 133-152.
Bovenberg, L., and L. Goulder. "Environmental Taxation and Regulation." In Handbook of Public Economics. Vol. 3. Edited by A. Auerbach and M. Feldstein. Amsterdam: Elsevier, 2002, pp. 1474-1545.
Chay, K., and M. Greenstone. "The Impact of Air Pollution on Infant Mortality: Evidence from Geographic Variation in Pollution Shocks Induced by a Recession." Quarterly Journal of Economics 118 (August 2003): 1121-1167.
———. "Does Air Quality Matter? Evidence from the Housing Market." Mimeo, MIT, 2003.
Cropper, M., and W. Oates. "Environmental Economics: A Survey." Journal of Economic Literature 30 (June 1992): 675-740.
Dasgupta, P., and G. Heal. Chapter 3 in The Economics of Exhaustible Resources. Cambridge: Cambridge University Press, 1979.
Diamond, P. "Consumption Externalities and Imperfect Corrective Pricing." Bell Journal of Economics 4 (1973): 526-538.
Goulder, L. "Environmental Taxation and the Double Dividend: A Reader's Guide." International Tax and Public Finance 2 (August 1995): 157-183.
Greenstone, M. "The Impacts of Environmental regulations on Industrial Activity: Evidence from the 1970 and 1977 Clean Air Act Amendments and the Census of Manufactures." Journal of Political Economy 110 (December 2002): 1175-1219.
Fullerton, D., and T. Kinnaman. "Household Response to Pricing Garbage by the Bag." American Economic Review 86 (September 1996): 971-984.
Schmalensee, R., et al. "An Interim Evaluation of Emissions Trading." Journal of Economic Perspectives (Summer 1998): 53-68.
Stavins, R. "What Can We Learn from the Grand Policy Experiment? Lessons from SO2 Allowance Trading." Journal of Economic Perspectives (Summer 1998): 69-88.
4. Taxation and Saving
4.1 Background: Capital Income, Wealth, and Saving Behavior:
Aizcorbe, A., A. Kennickell, and K. Moore. "Recent Changes in U.S. Family Finances: Evidence from the 1998 and 2001 Survey of Consumer Finances." Federal Reserve Bulletin 89 (January 2003): 1-32.
Altonji, J., F. Hayashi, and L. Kotlikoff. "Parental Altruism and Inter Vivos Transfers: Theory and Evidence." Journal of Political Economy 105 (December 1997): 1121-1166.
Bernheim, B., A. Shleifer, and L. Summers. "The Strategic Bequest Motive." Journal of Political Economy 93 (December 1985): 1045-1076.
Bernheim, B., and S. Severinov. "Bequests as Signals: An Explanation for the Equal Division Puzzle." Journal of Political Economy 111 (August 2003): 733-764.
Gravelle, J. The Economic Effects of Taxing Capital Income. Cambridge: MIT Press, 1994.
Gustman, A., and F. Juster. "Income and Wealth of Older American Households." In Assessing Knowledge of Retirement Behavior. Edited by E. Hanushek and N. Maritato. Washington: National Academy of Sciences, 1996, pp. 11-60.
Kotlikoff, L. "Intergenerational Transfers and Saving." Journal of Economic Perspectives 2 (Spring 1988): 41-58.
Modigliani, F. "The Role of Intergenerational Transfers and Lifecycle Saving in the Accumulation of Wealth." Journal of Economic Perspectives 2 (Spring 1988): 15-40.
Poterba, J. "Personal Saving Behavior and Retirement Income Modelling: A Research Assessment." In Assessing Knowledge of Retirement Behavior. Edited by E. Hanushek and N. Maritato. Washington: National Academy of Sciences, 1996, pp. 123-148.
Wilhelm, M. "Bequest Behavior and the Effect of Heirs Earnings: Testing the Altruistic Model of Bequests." American Economic Review 86 (September 1996): 874-892.
4.2 The Fundamental Tax Reform Debate: Income Taxes vs. Consumption Taxes:
Altig, D., A. Auerbach, L. Kotlikoff, K. Smetters, and J. Walliser. "Simulating Fundamental Tax Reform in the United States." American Economic Review 91 (June 2001): 574-595.
Andrews, W. "A Consumption Type or Cash Flow Personal Income Tax." Harvard Law Review 87 (April 1974): 1113-1188.
Auerbach, A., and L. Kotlikoff. Chapter 5 in Dynamic Fiscal Policy. Cambridge: Cambridge University Press, 1987.
Bradford, D. Blueprints for Basic Tax Reform. Arlington, VA: Tax Analysts, 1984.
Graetz, M. "Expenditure Tax Design." In Which Should Be Taxed? Income or Expenditure. Edited by J. Pechman. Washington: Brookings Institution, 1980, pp. 161-276.
Hall, R., and A. Rabushka. The Flat Tax. 2nd ed. Stanford: Hoover Institution Press, 1995.
McLure, C. The Value Added Tax. Washington: American Enterprise Institute, 1988.
4.3 Tax Policy, Rates of Return, and Saving:
Abrar, M. "The Interest Elasticity of Saving and the Functional Form of the Utility Function." Southern Economic Journal 55 (January 1989): 594-600.
Atkinson. A., and J. Stiglitz. Chapter 3 in Lectures in Public Economics.
Attanasio, O., and G. Weber. "Consumption Growth, the Interest Rate, and Aggregation." Review of Economic Studies 60 (July 1993): 631-650.
Bernheim, D. "Taxation and Saving." In Handbook of Public Economics. Vol. 3. Edited by A. Auerbach and M. Feldstein. Amsterdam: Elsevier, 2002, pp. 1173-1249.
Boskin, M. "Taxation, Savings, and the Rate of Interest." Journal of Political Economy 86 (1978): S3-S27.
Hall, R. "Intertemporal Substitution in Consumption." Journal of Political Economy 96 (April 1988): 339-357.
Mulligan, C. "Capital, Interest, and Aggregate Intertemporal Substitution During the 20th Century." Mimeo, University of Chicago, February 2002.
Ogaki, M., and C. Reinhart. "Measuring Intertemporal Substitution: The Role of Durable Goods." Journal of Political Economy 106 (October 1998): 1078-1098.
Summers, L. "Capital Taxation and Accumulation in a Life Cycle Model." American Economic Review 71 (September 1981): 533-544.
Vissing-Jorgensen, A. "Limited Asset Market Participation and the Elasticity of Intertemporal Substitution." Journal of Political Economy 110 (August 2002): 825-853.
4.4 Targeted Tax Subsidies to Saving:
Agnew, J., P. Balduzzi, and A. Sunden. "Portfolio Choice and Trading in a Large 401(k) Plan." American Economic Review 93 (March 2003): 193-215.
Benjamin, D. "Does 401(k) Eligibility Increase Saving? Evidence from Propensity Score Subclassification." Journal of Public Economics 87 (May 2003): 1259-1290.
Duflo, E., and E. Saez. "Participation and Investment Decisions in a Retirement Plan: The Influence of Colleagues' Choices." Journal of Public Economics 85 (July 2002): 121-148.
Engen, E., W. Gale, and J. Scholz. "Do Saving Incentives Work?" Brookings Papers on Economic Activity 1994: 2, 85-180.
———. "The Illusory Effects of Saving Incentives." Journal of Economic Perspectives 10 (Fall 1996): 113-138.
Gale, W., and J. Scholz. "IRAs and Household Saving." American Economic Review 84 (December 1994): 1233-1260.
Gale, W. "The Effects of Pensions on Household Wealth: A Re-Evaluation of Theory and Evidence." Journal of Political Economy 106 (August 1998): 706-723.
Madrian, B., and D. Shea. "The Power of Suggestion: Inertia in 401(k) Participation and Saving Behavior." Quarterly Journal of Economics 116 (November 2001): 1149-1187.
Milligan, K. "How Do Contribution Limits Affect Contributions to Tax-Preferred Saving Accounts?" Journal of Public Economics 87 (February 2003): 253-282.
Poterba, J., S. Venti, and D. Wise. "Do 401(k) Contributions Crowd Out Other Personal Saving?" Journal of Public Economics 58 (September 1995): 1-32.
———. "How Retirement Saving Programs Increase Saving." Journal of Economic Perspectives 10 (Fall 1996): 91-112.
———. "The Transition to Personal Accounts and Increasing Retirement Wealth: Micro and Macro Evidence." NBER Working Paper 8610, 2001.
4.5 The Taxation of Capital: Finite Horizon and Overlapping-Generation Models:
Aiyagari, S. "Optimal Capital Income Taxation with Incomplete Markets, Borrowing Constraints, and Constant Discounting." Journal of Political Economy 103 (1995): 1158-1175.
Atkeson, A., V. Chari, and P. Kehoe. "Taxing Capital Income: A Bad Idea." Federal Reserve Bank of Minneapolis Quarterly Review 23 (Summer 1999): 3-18.b
A. Atkinson and A. Sandmo, "Welfare Implications of the Taxation of Savings," Economic Journal 90 (1980), 529-549.
Atkinson, A., and J. Stiglitz. Chapter 8.
Chamley, C. "Efficient Tax Reform in a Dynamic Model of General Equilibrium." Quarterly Journal of Economics 100 (May 1985): 335-356.
Diamond, P. "The Incidence of an Interest Income Tax." Journal of Economic Theory 2 (1970): 211-224.
Feldstein, M. "The Welfare Cost of Capital Income Taxation." Journal of Political Economy 86 (April 1978): S29-52.
Judd, K. "Optimal Taxation in Dynamic Stochastic Economies: Theory and Evidence." Mimeo, Hoover Institution, 1989.
Judd, K. "The Welfare Cost of Factor Taxation in a Perfect Foresight Model." Journal of Political Economy 95 (1987): 675-709.
Lucas, R. "Supply-Side Economics: An Analytical Review." Oxford Economic Papers 42 (1990): 293-316.
Stokey, N., and S. Rebelo. "Growth Effects of Flat-Rate Taxes." Journal of Political Economy 103 (1995): 519-550.
4.6 Taxation of Capital Gains:
Atkinson, A., and J. Stiglitz. Chapter 4 in Lectures in Public Economics.
Auerbach, A. "Capital Gains Taxation in the United States: Realizations, Revenue, and Rhetoric." Brookings Papers on Economic Activity 1988: 2, 595-631.
Auerbach, A., and J. Seigel. "Capital Gains Realizations of the Rich and Sophisticated." American Economic Review 90 (May 2000): 276-282.
Auten, G., and C. Clotfelter. "Permanent vs. Transitory Tax Effects and the Realization of Capital Gains." Quarterly Journal of Economics 97 (1982): 613-632.
Balcer, Y., and K. Judd. "Effects of Capital Gains Taxation on Life-Cycle Investment and Portfolio Management." Journal of Finance 42 (July 1987): 743-61.
Burman, L., and W. Randolph. "Measuring Permanent Responses to Capital Gains Tax Changes in Panel Data." American Economic Review 84 (September 1994): 794-809.
Bulow, J., and L. Summers. "The Taxation of Risky Assets." Journal of Political Economy 92 (1984): 20-39.
Feldstein, M., J. Slemrod, and S. Yitzhaki. "The Effects of Taxation on the Selling and Switching of Common Stock." Quarterly Journal of Economics 94 (1980): 777-791.
Gordon, R. "Taxation of Corporate Capital Income: Tax Revenues vs. Tax Distortions." Quarterly Journal of Economics 100 (1985): 1-28.
Ilkovich, Z., J. Poterba, and S. Weisbenner. "Tax-Motivated Trading by Individual Investors." Mimeo, MIT, August 2003.
Poterba, J. "Taxation, Risk-Taking, and Household Portfolio Behavior." In Handbook of Public Economics. Vol. 3. Edited by A. Auerbach and M. Feldstein. Amsterdam: Elsevier, 2002, pp. 1110-1171.
———. "How Burdensome are Capital Gains Taxes?" Journal of Public Economics 33 (1987): 153-172.
Stiglitz, J. "Some Aspects of the Taxation of Capital Gains." Journal of Public Economics 21 (1983): 257-294.
5. Taxation and Firm Behavior
5.1 Taxation of Corporate Capital: Investment Incentives:
Auerbach, A. "Taxation, Corporate Financial Policy, and the Cost of Capital." Journal of Economic Literature 21 (1983): 905-940.
———. "The Tax Reform Act of 1986 and the Cost of Capital." Journal of Economic Perspectives 1 (1987): 73-86.
Bernanke, B., H. Bohn, and P. Reiss. "Alternative Non-nested Specification Tests of Time Series Investment Models." Journal of Econometrics 37 (March 1988): 293-326.
Blundell, R., et al. "Investment and Tobin's Q: Evidence from Company Panel Data." Journal of Econometrics 51 (January/February 1992): 233-258.
Caballero, R., E. Engel, and J. Haltiwanger. "Plant Level Adjustment and Aggregate Investment Dynamics." Brookings Papers on Economic Activity 1995: 2, 1-39.
Fazzari, S., R. Hubbard, and B. Peterson. "Financing Constraints and Corporate Investment." Brookings Papers on Economic Activity 1987: 2, 141-195.
Goolsbee, A. "Investment Incentives and the After-Tax Price of Capital Goods." Quarterly Journal of Economics 113 (1998): 121-148.
Hassett, K., and R. G. Hubbard. "Tax Policy and Business Investment." In Handbook of Public Economics. Vol. 3. Edited by A. Auerbach and M. Feldstein. Amsterdam: Elsevier, 2002, pp. 1294-1343.
Lamont, O. "Cash Flow and Investment: Evidence from Internal Capital Markets." Journal of Finance 52 (March 1997): 83-109.
Schaller, H. "Estimating the Long-Run User Cost Elasticity." Mimeo, Carlton University, 2003.
Summers, L. "Investment, Taxation, and Q." Brookings Papers on Economic Activity 1 (1981): 67-127.
5.2 Taxation of Corporate Capital: The Role of Financial Policy:
Auerbach, A. "Taxation and Corporate Financial Policy." In Handbook of Public Economics. Vol. 3. Edited by A. Auerbach and M. Feldstein. Amsterdam: Elsevier, 2002, pp. 1252-1292.
Auerbach, A., and K. Hassett. "On the Marginal Source of Investment Funds." Journal of Public Economics 87 (January 2003): 205-232.
Bagwell, L., and J. Shoven. "Cash Distributions to Shareholders." Journal of Economic Perspectives 3 (Summer 1989): 129-140.
Brav, A., J. Graham, C. Harvey, and R. Michaely. "Payout Policy in the 21st Century." NBER Working Paper 9657, April 2003.
Bernheim, D. "Tax Policy and the Dividend Puzzle." RAND Journal of Economics 22 (Winter 1991): 455-476.
Bernheim, D., and A. Wantz. "A Tax-Based Test of the Dividend Signalling Hypothesis." American Economic Review 85 (June 1995): 532-551.
Boyd, J., and R. Jagannathan. "Ex-Dividend Price Behavior of Common Stocks." Review of Financial Studies 7 (Winter 1994): 711-741.
Bradford, D., and R. Gordon. "Taxation and the Stock Market Value of Capital Gains & Dividends: Theory & Empirical Results." Journal of Public Economics 14 (1980): 109-36.
Givoly, D., et al. "Taxes & Capital Structure: Evidence from Firms' Responses to the Tax Reform Act of 1986." Review of Financial Studies 5 (1992): 331-355.
Gordon, R., and B. Malkiel. "Corporation Finance." In How Do Taxes Affect Economic Behavior. Edited by H. Aaron and J. Pechman. Brookings: Washington, 1981, pp. 131-198.
Graham, J. "Taxes and Corporate Finance: A Review." Review of Financial Studies (2003, forthcoming).
———. "Debt and the Marginal Tax Rate." Journal of Financial Economics 41 (May 1996): 41-74.
———. "How Big Are the Tax Benefits of Debt?" Journal of Finance 55 (October 2000): 1901-41.
Hennessy, C., and T. Whited. "Debt Dynamics." Mimeo, Haas School - UC Berkeley, 2003.
Mackie-Mason, J. "Do Taxes Affect Corporate Financing Decisions." Journal of Finance 45 (December 1990): 1471-1494.
Miller, M. "Debt and Taxes." Journal of Finance 32 (1977): 261-275.
Poterba, J., and L. Summers. "The Economic Effects of Dividend Taxation." In Recent Advances in Corporation Finance. Edited by E. Altman and M. Subrahmanyam. Homewood, IL: Dow Jones-Irwin, 1985, pp. 227-284.
6. The Theory of Tax Incidence
6.1 General Equilibrium Incidence: The Harberger Model:
Atkinson, A., and J. Stiglitz. Chapter 6 in Lectures on Public Economics. McGraw-Hill, Inc.: New York, 1980.
Bradford, D. "Factor Prices May be Constant but Factor Returns are Not." Economic Letters 1 (1978): 199-203.
Ballard, C., D. Fullerton, J. Shoven, and J. Whalley. Chapters 2 and 3 in A General Equilibrium Model for Tax Policy Evaluation. Chicago: University of Chicago Press, 1985.
Diamond, P. "Tax Incidence in a Two Good Model." Journal of Public Economics 9 (1978): 283-299.
Fullerton, D., and G. Metcalf. "Tax Incidence." In Handbook of Public Economics. Vol. 4. Edited by A. Auerbach and M. Feldstein. Amsterdam: North Holland, 2002.
Harberger, A. "The Incidence of the Corporation Income Tax." Journal of Political Economy 70 (1962): 215-240.
Mulligan, C. "Capital Tax Incidence: First Impressions from the Time Series." NBER Working Paper, 2002.
6.2 Asset Prices and Tax Incidence:
Cutler, D. "Tax Reform and the Stock Market: An Asset Price Approach." American Economic Review 78 (December 1988): 1107-1117.
Lang, M., and D. Shackelford. "Capitalization of Capital Gains Taxes: Evidence from Stock Price Reactions to the 1997 Rate Reduction." Journal of Public Economics 76 (2000): 69-85.
6.3 Application: Taxation and Housing Markets:
Berkovec, J., and D. Fullerton. "A General Equilibrium Model of Housing, Taxes, and Portfolio Choice." Journal of Political Economy 100 (April 1992): 390-429.
DiPasquale, D., and W. Wheaton. "The Cost of Capital, Tax Reform, and the Future of the Rental Housing Market." Journal of Urban Economics 31 (May 1992): 337-359.
Poterba, J. "Tax Subsidies to Owner-Occupied Housing: An Asset Market Approach." Quarterly Journal of Economics 99 (1984): 729-752.
———. "Taxes and Housing Markets: Old Questions, New Answers." American Economic Review 82 (May 1992): 237-242.
Rosen, H. "Housing Subsidies: Effects on Housing Decisions, Efficiency, and Equity." In Handbook of Public Economics. Vol. I. Edited by A. Auerbach and M. Feldstein. Amsterdam: North Holland, 1985, 375-420.
6.4 Lifecycle vs. Snapshot Incidence:
Fullerton, D., and D. Rogers. Who Bears the Lifetime Tax Burden? Washington: Brookings Institution, 1993.
Pechman, J. Who Paid the Taxes 1966-1985. Washington: Brookings Institution, 1986.
———. "Lifetime Incidence and the Distributional Burden of Excise Taxes." American Economic Review 79 (May 1989): 325-330.