PUBLIC FINANCE II: EC31P or ECON3017
SEMESTER II Dr. Edward E. Ghartey
ECON-Room 11
Office Hrs: Tue., Wed and Th.: 2:00-3:00pm Office: (876) 512-3280
Overview
This course deals with taxation in both theory and in the context of
Jamaica . It discusses the background of taxation, the incidence of taxation, the efficiency of taxation, issues relating to optimal taxation, tax avoidance, and the recent developments and reforms proposed by the tax review committee in the country.
Distribution of Grades
Mid-Term Examination 30%
Final Examination 70%
Class attendance and participation are very important because each week’s learning depends on accurate understanding of what had preceded it. Students are advised to consult The UWI’s Faculty of Social Sciences’ Academic Year 2007/08 Handbook for rules and regulations governing the class. The date for the mid-term examination and the content of the said examination will be determined by students’ consensus with the tacit approval of the instructor.
Required Text Book
Joseph E. Stiglitz (2000), Economics of the Public Sector, (
New York : W.W. Norton & Company).
Related Text Book
David N. Hyman (2004), Public Finance: A Contemporary Application of Theory to Policy with Applications, (New York:
South-Western
College Publisher).
Rosen, Harvey S. (2005), Public Finance, (
New York : McGraw-Hill/Irwin).
Chapter 17: Introduction to Taxation, p.451
Background of taxation, 452
The five desirable characteristics of any tax system, p.456
General framework for choosing among tax systems, p.476
Chapter 18: Tax Incidence, p.482
Tax incidence in competitive markets, p.484
Tax incidence of environments without perfect competition, p.498
Equivalent taxes, p.502
Other factors affecting tax incidence, 505
Who bears most incidences of taxes? p.510
Comparison of the effects of an ad valorem and specific commodity tax on a monopolist
Chapter 19: Taxation and Economic Efficiency, p.518
Effect of taxes borne by consumers, p.519
Quantifying the distortions, 521
Effects of taxes borne by producers, p.529
Taxation of savings, p.532
Taxation of labor income, p.535
Measuring the effects of taxes on labor supplied, p.541
Chapter 20: Optimal Taxation, p.550
Two fallacies of optimal taxation, p.551
Optimal and Pareto efficient taxation, p.552
Differential taxation, 562
Taxes on producers, 567
Deriving Ramsey taxes on commodities, p.572
Derivation of Ramsey formula from a linear demand schedule, p. 574
Chapter 24: A Guide to Tax Avoidance, p.678
Principles of tax avoidance, p.679
Tax shelters, p.684
Tax reform and tax avoidance, 687
Equity, efficiency, and tax reform, 690
The tax review committee’s report and the current budget
Additional readings will be provided in the course of the lectures.
