1、CHAPTER 1IntroductionCopyright 2010 by the McGraw-Hill Companies,Inc.All rights reserved.McGraw-Hill/Irwin1-2Defining the Field of Study Public Finance the field of economics that analyzes government taxation and spending policies Public Sector Economics see definition above Public Economics see def
2、inition above What is not part of public finance?1-3Public Finance and Ideology Organic view of government Mechanistic view of government1-4The Legal Framework Federal government Federal Constitutional provisions Article 1,Section 8 Article 1,Section 9 16th Amendment 5th Amendment1-5The Legal Framew
3、ork State governments Federal constitutional provisions 10th amendment The State constitutions Local governments Derive power to tax and spend from the States Fiscal independence of local governments1-6The Size of Government How to measure the size of government Number of workers Annual expenditures
4、 Types of government expenditure Purchases of goods and services Transfers of income Interest payments Budget documents Unified budget Regulatory budget1-7State,Local,and Federal Government Expenditures(selected years)1234Total Expenditures(billions)2008 Dollars(billions)*2008 Dollars per capitaPerc
5、ent of GDP19601237143,95023.3%19702951,3086,37928.4%19808431,9058,36730.2%19901,8732,80411,21032.2%20002,8873,52712,48729.4%20084,7234,72315,48833.1%*Conversion to 2008 dollars done using the GDP deflatorSource:Calculations based on Economic Report of the President,2009 pp.282,286,325,381.Adjusting
6、for InflationAdjusting for PopulationRelative to Economy1-8Government Expenditures as a Percentage of GDP(2008)UnitedStatesSource:Organization for Economic Cooperation and Development 2008a.1-9Composition of Federal Expenditures(1965 and 2008)Note decline in DefenseNote increase in Social Security,M
7、edicare and Income SecuritySource:Economic Report of the President,2009 p.379.1-10Source:Economic Report of the President 2009,p.389.Composition of State&Local Expenditures(1965 and 2008)Increase in public welfareDecline in highways1-11Source:Economic Report of the President 2009,p.379.Composition o
8、f Federal Taxes(1965 and 2008)Social insurance and individual incometax have become more importantCorporate and othertaxes have become less important1-12Source:Economic Report of the President 2009,p.385.Individual tax more importantProperty tax less importantComposition of State And Local Taxes(196
9、5 and 2005)1-13Changes in the Real Value of Debt Inflation tax1-14Doing Research in Public Finance Public Finance journals International Tax and Public Finance Journal of Public Economics National Tax Journal Public Finance Public Finance Quarterly General-interest journals American Economic Review
10、Journal of Economic Perspectives Journal of Political Economy Quarterly Journal of Economics Review of Economics and Statistics1-15Doing Research in Public Finance Other sources Journal of Economic Literature Brookings Institutions Studies of Government Finance Congressional Budget Office reports Na
11、tional Bureau of Economic Research working papers Tax Foundations Facts and Figures on Government Finance U.S.Government Printing Office publications Statistical Abstract of the United States Economic Report of the President Budget of the United States U.S.Census of Governments Historical Statistics of the United States from Colonial Times to 19701-16Doing Research in Public Finance Public Finance data available on Internet Resources for Economists on the Internet U.S.Census Bureau University of Michigans Office of Tax Policy Research Urban-Brookings Tax Policy Center
