Lectures on the economic theory of taxation. Economic reform, socially optimal piecemeal consumption, taxation structures and information (Q1311462)

The book is made up of two sets of lectures with an introductory and a concluding section. The discussion of taxation theory contained in these lectures is based on two sets of assumptions: first of all, the community in which changes in public policy are contemplated is interested in achieving distributive justice among the members of the community; secondly, the economic system is constrained from achieving efficiency and the public authority, in turn, is constrained in its use of policy instruments. Added to these is the implicit belief that the agents have limited access to relevant and accurate information. The first of the lectures (Sections 1 to 6) begins with an explicit recognition of the fact that detailed information about the social welfare functions (swf) may not be available. Given this fact, under what circumstances would a community gain from reforming a distorted economic system by a small amount and in a given direction? This is the question that is analysed; an answer to this question is shown to require relatively little information about the form of the swf; but other information problems may still persist. Consequently, the question whether a community has benefitted from some small change may not be easily settled. The second set of lectures (Sections 7 to 14) is addressed to an analysis of the following question: when is it socially optimal to apply piecemeal consumption taxation structures and systems? The objective here is to establish that there are no relatively simple solutions to a wide range of problems in taxation theory. Most of the excercises in the book are analysed within a model which consists of (i) a general differential form of the swf and (ii) two reduced form equations representing changes of individual utility within a distorted economic system. Together with the above, different assumptions are employed to cover a wide range of topics in taxation theory.