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| Preface | |
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| Introduction | |
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| The Public Sector in a Mixed Economy | |
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| The Economic Role of Government | |
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| What or Who is the Government? | |
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| Thinking Like a Public Sector Economist | |
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| Disagreements Among Economists | |
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| Review and Practice | |
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| The Public Sector in the United States | |
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| Types of Government Activity | |
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| Gauging the Size of the Public Sector | |
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| Government Revenues | |
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| Deficit Financing | |
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| Playing Tricks With the Data on Government Activities | |
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| Review and Practice | |
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| Fundamentals of Welfare Economics | |
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| Market Efficiency | |
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| The Invisible Hand of Competitive Markets | |
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| Welfare Economics and Pareto Efficiency | |
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| Analyzing Economic Efficiency | |
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| Review and Practice | |
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| Market Failure | |
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| Property Rights and Contract Enforcement | |
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| Market Failures and the Role of Government | |
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| Redistribution and Merit Goods | |
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| Two Perspectives on the Role of Government | |
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| Review and Practice | |
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| Efficiency and Equity | |
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| Efficiency and Distribution Trade-Offs | |
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| Analyzing Social Choices | |
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| Social Choices in Practice | |
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| Three Approaches to Social Choices | |
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| Review and Practice | |
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| Alternative Measures of Inequality | |
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| The Lorenz Curve | |
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| The Dalton-Atkinson Measure | |
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| Public Expenditure Theory | |
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| Public Goods and Publicly Provided Private Goods | |
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| Public Goods | |
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| Publicly Provided Private Goods | |
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| Efficiency Conditions for Public Goods | |
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| Efficient Government as a Public Good | |
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| Review and Practice | |
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| The Leftover Curve | |
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| Measuring the Welfare Cost of user Fees | |
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| Public Choice | |
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| Public Mechanisms for Allocating Resources | |
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| Alternatives for Determining Public Goods Expenditures | |
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| Politics and Economics | |
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| Review and Practice | |
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| New Preference-Revelation Mechanisms | |
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| Public Production and Bureaucracy | |
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| Natural Monopoly: Public Production of Private Goods | |
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| Comparison of Efficiency in the Public and Private Sectors | |
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| Sources of Inefficiency in the Public Sector | |
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| Corporatization | |
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| A Growing Consensus on Government's Role in Production | |
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| Review and Practice | |
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| Externalities and the Environment | |
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| The Problem of Externalities | |
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| Private Solutions to Externalities | |
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| Public Sector Solutions to Externalities | |
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| Protecting the Environment: the Role of Government in Practice | |
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| Review and Practice | |
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| Expenditure Programs | |
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| The Analysis of Expenditure Policy | |
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| Need for Program | |
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| Market Failures | |
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| Alternative Forms of Government Intervention | |
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| The Importance of Particular Design Features | |
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| Private Sector Responses to Government Programs | |
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| Efficiency Consequences | |
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| Distributional Consequences | |
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| Equity-Efficiency Trade-Offs | |
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| Public Policy Objectives | |
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| Political Process | |
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| Review and Practice | |
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| Cost-Benefit Analysis | |
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| Private Cost-Benefit Analysis | |
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| Social Cost-Benefit Analysis | |
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| Consumer Surplus and the Decision to Undertake a Project | |
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| Measuring Non-Monetized Costs and Benefits | |
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| Shadow Prices and Market Prices | |
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| Discount Rate for Social Cost-Benefit Analysis | |
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| The Evaluation of Risk | |
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| Distributional Considerations | |
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| Cost Effectiveness | |
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| Review and Practice | |
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| Health Care | |
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| The Health Care System in the United States | |
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| Rationale For a Role of Government in the Health Care Sector | |
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| Reforming Health Care | |
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| Review and Practice | |
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| Defense and Technology | |
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| Defense Expenditures | |
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| Increasing the Efficiency of the Defense Department | |
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| Defense Conversion | |
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| Technology | |
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| Review and Practice | |
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| Social Insurance | |
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| The Social Security System | |
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| Social Security, Private Insurance, and Market Failures | |
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| Should Social Security be Reformed? | |
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| Reforming Social Security | |
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| Review and Practice | |
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| Welfare Programs and the Redistribution of Income | |
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| A Brief Description of Major U.S. Welfare Programs | |
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| Rationale for Government Welfare Programs | |
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| Analytic Issues | |
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| Welfare Reform: Integration of Programs | |
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| The Welfare Reform Bill of 1996 | |
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| Concluding Remarks | |
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| Review and Practice | |
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| Education | |
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| The Structure of Education in the United States | |
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| Why is Education Publicly Provided and Publicly Financed? | |
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| Issues and Controversies in Educational Policy | |
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| Aid to Higher Education | |
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| Review and Practice | |
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| How Should Public Educational Funds be Allocated? | |
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| Taxation: Theory | |
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| Introduction to Taxation | |
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| Background | |
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| The Five Desirable Characteristics of any Tax System | |
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| General Framework for Choosing Among Tax Systems | |
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| Review and Practice | |
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| Tax Incidence | |
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| Tax Incidence in Competitive Markets | |
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| Tax Incidence of Environments Without Perfect Competition | |
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| Equivalent Taxes | |
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| Other Factors Affecting Tax Incidence | |
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| Incidence of Taxes in the United States | |
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| Review and Practice | |
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| Comparison of the Effects of an Ad Valorem and Specific Commodity Tax on a Monopolist | |
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| Taxation and Economic Efficiency | |
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| Effect of Taxes Borne by Consumers | |
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| Quantifying the Distortions | |
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| Effects of Taxes Borne by Producers | |
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| Taxation of Savings | |
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| Taxation of Labor Income | |
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| Measuring the Effects of Taxes on Labor Supplied | |
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| Review and Practice | |
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| Optimal Taxation | |
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| Two Fallacies of Optimal Taxation | |
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| Optimal and Pareto Efficient Taxation | |
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| Differential Taxation | |
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| Taxes on Producers | |
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| Review and Practice | |
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| Deriving Ramsey Taxes on Commodities | |
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| Derivation of Ramsey Formula for Linear Demand Schedule | |
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| Taxation of Capital | |
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| Should Capital be Taxed? | |
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| Effects on Savings and Investment | |
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| Impact on Risk Taking | |
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| Measuring Changes in Asset Values | |
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| Review and Practice | |
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| Taxation in the United States | |
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| The Personal Income Tax | |
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| Outline of the U.S. Income Tax | |
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| Principles Behind the U.S. Income Tax | |
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| Practical Problems in Implementing an Income Tax System | |
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| Special Treatment of Capital Income | |
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| Concluding Comments | |
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| Review and Practice | |
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| The Corporation Income Tax | |
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| The Basic Features of the Corporation Income Tax | |
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| The Incidence of the Corporation Income Tax and its Effect on Efficiency | |
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| Depreciation | |
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| Combined Effects of Individual and Corporate Income Tax | |
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| The Corporation Tax as Economic Policy | |
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| Taxation of Multinationals | |
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| Should There be a Corporation Income Tax? | |
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| Review and Practice | |
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| A Student's Guide to Tax Avoidance | |
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| Principles of Tax Avoidance | |
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| Tax Shelters | |
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| Tax Reform and Tax Avoidance | |
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| Equity, Efficiency, and Tax Reform | |
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| Review and Practice | |
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| Reform of the Tax System | |
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| Fairness | |
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| Efficiency | |
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| Simplifying the Tax Code and Reducing Administrative Costs | |
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| Transition Issues and the Politics of Tax Reform | |
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| Tax Reforms for the Twenty-First Century | |
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| Review and Practice | |
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| Further Issues | |
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| Fiscal Federalism | |
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| The Division of Responsibilities | |
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| Principles of Fiscal Federalism | |
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| Production Versus Finance | |
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| Review and Practice | |
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| State and Local Taxes and Expenditures | |
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| Tax Incidence Applied to Local Public Finance | |
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| Capitalization | |
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| Public Choice at the Local Level | |
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| Problems of Multi-Jurisdictional Taxation | |
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| Review and Practice | |
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| Deficit Finance | |
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| The U.S. Deficit Problem Since the 1980s | |
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| Consequences of Government Deficits | |
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| Improving the Budgetary Process | |
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| The Long-Term Problem: Entitlements and the Aged | |
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| Review and Practice | |