A Study in Public Finance.

Dalton, Hugh; Pigou, A. C.

doi:10.2307/2547800

Cited by 11 publications

(9 citation statements)

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“…But choosing to inflate deliberately, to reduce the debt-to-income ratio, involves a neglect of the future. This is what Pigou (1928), the early-twentieth-century British economist, referred to as a 'defective telescopic faculty'.…”

Section: Partmentioning

confidence: 96%

Another Look at a Sensible Fiscal Policy for the Sharp Rise in Government Debt

Capie,

Chapman,

Marsh

et al. 2023

NIER

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This paper weighs possible medium-term responsible policy choices to the extraordinary expansion of government spending in response to the COVID-19 outbreak. The paper is divided into two parts. In part 1 of the paper, we look at conventional debt sustainability and question whether conventional rules created during a period of high interest rates and high inflation remain relevant. Current and future conditions support a case for government debt/GDP to remain elevated compared to history, conditional upon limited state interference in the economy to allow appropriate allocation of capital and resources. In part 2, we consider the historical experience of the United Kingdom. History shows the country had several examples of rapid, large-scale expansion of government debt relative to the size of the economy. On each occasion, the elevated level of debt-to-GDP was later reduced by a combination of relatively benign factors, including commitment to low inflation and sound monetary system. This supported the financial probity of the UK government and allowed it to continue to borrow unimpeded.

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Section: Partmentioning

confidence: 96%

Another Look at a Sensible Fiscal Policy for the Sharp Rise in Government Debt

Capie,

Chapman,

Marsh

et al. 2023

NIER

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“…Gerber et al (2020) note that an ideal measure would capture the degree of progressivity of a tax system in one figure and also be unaffected by the (pre‐tax) income distribution. The most straightforward—and easily understood—measure of progressivity is that which originated in Pigou (1928), called the average rate progression (ARP). This is a ‘local’ measure of progressivity, calculated around two levels of income and is calculated simply as

$$ \boldsymbol{p}&amp;amp;#x0003D;\frac{\left({ETR}_{{\mathrm{Y}}_2}-{ETR}_{Y_1}\right)}{\left({Y}_2-{Y}_1\right)}.

…”

Section: The Progressivity Of Eitmentioning

confidence: 99%

The taxation of employment income in African countries: Findings from a new dataset

McNabb

Granger

2023

J of Intl Development

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This study presents new evidence on the taxation of employment income in African countries. Utilising a unique dataset, we summarise trends in the policy design of personal income taxes and other mandatory contributions between 1995 and 2020. We analyse tax rates, thresholds and reform patterns, before comparing cross‐country effective tax rates and the progressivity of employment income taxes. We find that, inter alia, reform is infrequent, top marginal tax rates are lower than in the OECD and in 25% of African countries, an individual earning a wage equal to the PPP$1.90/day poverty line would be liable to pay income tax.

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“…More recently, many other leading economists have made supporting statements - Blaug (2000) cites the examples of Paul Samuelson, Milton Friedman, James Tobin, James Buchanan, and Robert Solow. Ramsey (1927), who had been mentored by Pigou (see Pigou (1928)), published his rule for avoiding excess burdens in taxation, which is that taxes should be inversely proportional to elasticities, whether of supply or demand. This rule leads directly to capital as the worst tax base (Judd (1985), Chamley (1986)), because of its infinite long-run elasticity (this includes the possibility of capital flight in an open economy), and land as the best tax base, because of its zero long-run elasticity.…”

Section: Gaffneymentioning

confidence: 99%