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Book 9: Power to Tax, The (Collected Works of James M. Buchanan)

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9: Power to Tax, The (Collected Works of James M. Buchanan)

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    Available in PDF - DJVU Format | 9: Power to Tax, The (Collected Works of James M. Buchanan).pdf | Language: ENGLISH
    James M. Buchanan(Author)

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Commenting on his collaboration with Geoffrey Brennan on The Power to Tax, James M. Buchanan says that the book is “demonstrable proof of the value of genuine research collaboration across national-cultural boundaries.” Buchanan goes on to say that “The Power to Tax is informed by a single idea—the implications of a revenue-maximizing government.”

Originally published in 1980, The Power to Tax was a much-needed answer to the tax revolts sweeping across the United States. It was a much-needed answer as well in the academic circles of tax theory, where orthodox public finance models were clearly inadequate to the needs at hand.

The public-choice approach to taxation which Buchanan had earlier elaborated stood in direct opposition to public-finance orthodoxy. What Buchanan and Brennan constructed in The Power to Tax was a middle ground between the two. As Brennan writes in the foreword, “The underlying motivating question was simple: Why not borrow the motivational assumptions standard in public-choice theory and put them together with assumptions about policy-maker discretion taken from public-finance orthodoxy?”

The result was a controversial book—and a much misunderstood one as well. Looking back twenty years later, Brennan feels confirmed in the rightness of the theories he and Buchanan espoused, particularly in their unity with the public-choice tradition: “The insistence on motivational symmetry is a characteristic feature of the public choice approach, and it is in this dimension that The Power to Tax and the orthodox public- finance approach diverge.”

James M. Buchanan is an eminent economist who won the Alfred Nobel Memorial Prize in Economic Sciences in 1986 and is considered one of the greatest scholars of liberty in the twentieth century.

The entire series will include:

Volume 1: The Logical Foundations of Constitutional Liberty
Volume 2: Public Principles of Public Debt
Volume 3: The Calculus of Consent
Volume 4: Public Finance in Democratic Process
Volume 5: The Demand and Supply of Public Goods
Volume 6: Cost and Choice
Volume 7: The Limits of Liberty
Volume 8: Democracy in Deficit
Volume 9: The Power to Tax
Volume 10: The Reason of Rules
Volume 11: Politics by Principle, Not Interest
Volume 12: Economic Inquiry and Its Logic
Volume 13: Politics as Public Choice
Volume 14: Debt and Taxes
Volume 15: Externalities and Public Expenditure Theory
Volume 16: Choice, Contract, and Constitutions
Volume 17: Moral Science and Moral Order
Volume 18: Federalism, Liberty, and the Law
Volume 19: Ideas, Persons, and Events
Volume 20: Indexes

This book provides analytic foundations for the discussion centering around questions of tax and the constitution, so prominent in political debate. -- Book Description --This text refers to the Paperback edition. This book provides analytic foundations for the discussion centering around questions of tax and the constitution, so prominent in political debate. --This text refers to the Paperback edition.

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Book details

  • PDF | 278 pages
  • James M. Buchanan(Author)
  • Liberty Fund (August 1, 2000)
  • English
  • 7
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Review Text

  • By Jerry H. Tempelman on March 14, 2005

    Geoffrey Brennan and James M. Buchanan's The Power to Tax provides an analytical framework for understanding the so-called taxpayers' revolt of the late 1970s, when taxpayers began using referendums to enact amendments to state constitutions in order to limit taxation and hold down public spending by state legislatures. The book combines the orthodox public-finance approach with the public-choice approach to normative tax analysis. Government does not really fit the description of benevolent despot that is implicit in orthodox public-finance theory, nor can the taxpayers' revolt be explained by the median-voter model of public-choice theory. Instead, citizen-taxpayers saw government as a budget-maximizing Leviathan-like bureaucracy, whose behavior can analytically be described by the monopoly model of mainstream economics.Traditional public-finance based normative tax analysis advises governments how to maximize revenues, or how to pluck the goose in order to obtain the most feathers with the least amount of hissing. It comes up with criteria of what it sees as efficiency and equity, such as comprehensiveness of the tax base and progression in the rate structure. Brennan & Buchanan instead adopt a different perspective: maximization of tax revenues may be in the interest of government (or, more precisely, of politicians and bureaucrats), but not of the citizen-taxpayer. The authors therefore come up with constitutional tax rules intended to constrain Leviathan. These rules are pretty much the opposite of those derived by orthodox public-finance theory, namely a non-comprehensive tax base and uniformity of tax rates (e.g. a proportional, or flat, tax).The reason why tax limitations are to be enacted at the constitutional level is that tax limitation proposals did not emerge from the normal electorate process. Mere electoral constraints proved inadequate in limiting government to the level desired by the citizen-taxpayer. Furthermore, tax limitations are designed specifically to prevent government from taking those actions that citizens-taxpayers believe government would have taken, in spite of existing electoral constraints, in the absence of tax limitations.In a nutshell, the book is about tax-base and tax-rate constraints. Conventional norms of tax analysis call for comprehensiveness and progression. But if you want to hold down the size of government, you do not favor comprehensiveness, and you favor uniformity of the tax rate. In short, if you want small government, you favor a flat tax with lots of deductions.Critics of the book have charged that government is not at all times akin to a revenue-maximizing Leviathan. But, although this may be true, constraining rules such as tax limitations may serve as a "worst-case" check intended to prevent government from becoming that. This point of clarification became the basis of the authors' subsequent collaboration, The Reason of Rules, which is vol. 10 in the Buchanan Collected Works series.The essence of The Power to Tax is also presented in two papers by the authors contained in volume 14 of Buchanan's Collected Works. I recommend that volume instead, since The Power to Tax does not really add much new insight to the analysis in those two papers.

  • By Phillip E. Myers on July 8, 2015

    I goofed up ad thought this source was the Papers of James Buchanan, U.S. President inthe 1850s. My bad.


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