Saying Too Little, Too Late: Public Finance Textbooks and the Excess Burdens of Taxation

Cecil Bohanon, John Horowitz () and James McClure

Econ Journal Watch, 2014, vol. 11, issue 3, 277-296

Abstract: Taxation has several significant excess burdens, including enforcement costs, compliance costs, and deadweight losses. Most estimates find that raising a dollar of tax revenue costs much more than a dollar. Unfortunately, commonly used public finance textbooks do not integrate these costs into discussions of public goods or cost-benefit analyses. Not including these costs means that the optimal levels of public goods will be overestimated. Textbooks say too little, too late about the excess burdens of taxation. They could easily introduce excess burdens early, represent them in public goods diagrams, and integrate them throughout public finance instruction.

Keywords: excess burden of taxation; compliance costs; administrative costs; economic education; public finance; deadweight loss; welfare cost (search for similar items in EconPapers)
JEL-codes: A2 H2 H4 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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