IDEAS home Printed from https://ideas.repec.org/a/ntj/journl/v50y1997i4p779-802.html

Peculiar Institutions: A British Perspective on Tax Policy in the United States

Author

Listed:
  • Keen, Michael

Abstract

Explains features of the U.S. tax system that may prove instructive for Britain and the EU, especially as they relate to federalism. Discusses low tax rates, absence of a VAT or national consumption tax, lack of interstate equalization, subsidization of low earnings under the earned income credit.

Suggested Citation

  • Keen, Michael, 1997. "Peculiar Institutions: A British Perspective on Tax Policy in the United States," National Tax Journal, National Tax Association;National Tax Journal, vol. 50(4), pages 779-802, December.
    • Handle: RePEc:ntj:journl:v:50:y:1997:i:4:p:779-802
    DOI: 10.1086/NTJ41789716
    as

    Download full text from publisher

    File URL: https://doi.org/10.1086/NTJ41789716
    Download Restriction: Access is restricted to subscribers and members of the National Tax Association.
    File URL: https://doi.org/10.1086/NTJ41789716
    Download Restriction: Access is restricted to subscribers and members of the National Tax Association.
    File URL: https://libkey.io/10.1086/NTJ41789716?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Robert Walker & Michael Wiseman, 1997. "The possibility of a British earned income tax credit," Fiscal Studies, Institute for Fiscal Studies, vol. 18(4), pages 401-425, November.
    2. Holtzblatt, Janet & McCubbin, Janet & Gillette, Robert, 1994. "Promoting Work Through the EITC," National Tax Journal, National Tax Association, vol. 47(3), pages 591-607, September.
    3. Gale, William G., 1997. "What Can America Learn From the British Tax System?," National Tax Journal, National Tax Association;National Tax Journal, vol. 50(4), pages 753-777, December.
    4. Michael Keen, 1998. "Vertical Tax Externalities in the Theory of Fiscal Federalism," IMF Staff Papers, Palgrave Macmillan, vol. 45(3), pages 454-485, September.
    5. Murray, Matthew N., 1997. "Would Tax Evasion and Tax Avoidance Undermine a National Retail Sales Tax?," National Tax Journal, National Tax Association;National Tax Journal, vol. 50(1), pages 167-182, March.
    6. Xavier Sala-i-Martin & Jeffrey Sachs, 1991. "Fiscal Federalism and Optimum Currency Areas: Evidence for Europe From the United States," NBER Working Papers 3855, National Bureau of Economic Research, Inc.
    7. Peter Sørensen, 1994. "From the global income tax to the dual income tax: Recent tax reforms in the Nordic countries," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 1(1), pages 57-79, February.
    8. Stacy Dickert & Scott Houser & John Karl Scholz, 1995. "The Earned Income Tax Credit and Transfer Programs: A Study of Labor Market and Program Participation," NBER Chapters, in: Tax Policy and the Economy, Volume 9, pages 1-50, National Bureau of Economic Research, Inc.
    9. Charles E. Mclure, 1987. "The Value-Added Tax: Key to Deficit Reduction?," Books, American Enterprise Institute, number 725195, September.
    10. J. A. Mirrlees, 1971. "An Exploration in the Theory of Optimum Income Taxation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 38(2), pages 175-208.
    11. Scholz, John Karl, 1994. "The Earned Income Credit: Participation, Compliance, and Antipoverty Effectiveness," National Tax Journal, National Tax Association, vol. 47(1), pages 63-87, March.
    12. Kanbur, Ravi & Keen, Michael & Tuomala, Matti, 1994. "Optimal non-linear income taxation for the alleviation of income-poverty," European Economic Review, Elsevier, vol. 38(8), pages 1613-1632, October.
    13. William G. Watson, 1986. "An Estimate of the Welfare Gain from Fiscal Equalization," Canadian Journal of Economics, Canadian Economics Association, vol. 19(2), pages 298-308, May.
    14. Pierfederico Asdrubali & Bent E. Sørensen & Oved Yosha, 1996. "Channels of Interstate Risk Sharing: United States 1963–1990," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(4), pages 1081-1110.
    15. Alan J. Auerbach & Jagadeesh Gokhale & Laurence J. Kotlikoff, 1994. "Generational Accounting: A Meaningful Way to Evaluate Fiscal Policy," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 73-94, Winter.
    16. Allen, Franklin, 1982. "Optimal linear income taxation with general equilibrium effects on wages," Journal of Public Economics, Elsevier, vol. 17(2), pages 135-143, March.
    17. Oates, Wallace E, 1985. "Searching for Leviathan: An Empirical Study," American Economic Review, American Economic Association, vol. 75(4), pages 748-757, September.
    18. Roger H. Gordon & Joel Slemrod, 1988. "Do We Collect Any Revenue from Taxing Capital Income?," NBER Chapters, in: Tax Policy and the Economy: Volume 2, pages 89-130, National Bureau of Economic Research, Inc.
    19. Koskela, Erkki & Vilmunen, Jouko, 1996. "Tax progression is good for employment in popular models of trade union behaviour," Labour Economics, Elsevier, vol. 3(1), pages 65-80, August.
    20. Marilyn R. Flowers, 1988. "Shared Tax Sources in a Leviathan Model of Federalism," Public Finance Review, , vol. 16(1), pages 67-77, January.
    21. Canzoneri,Matthew B. & Grilli,Vittorio & Masson,Paul R. (ed.), 1992. "Establishing a Central Bank," Cambridge Books, Cambridge University Press, number 9780521420983, January.
    22. Peter A. Diamond & J. A. Mirrlees, 1968. "Optimal Taxation and Public Production," Working papers 22, Massachusetts Institute of Technology (MIT), Department of Economics.
    23. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June.
    24. Brennan,Geoffrey & Buchanan,James M., 2006. "The Power to Tax," Cambridge Books, Cambridge University Press, number 9780521027922, January.
    25. repec:bla:scandj:v:97:y:1995:i:4:p:569-80 is not listed on IDEAS
    26. Oswald, Andrew J., 1983. "Altruism, jealousy and the theory of optimal non-linear taxation," Journal of Public Economics, Elsevier, vol. 20(1), pages 77-87, February.
    27. Alan J. Auerbach & Joel Slemrod, 1997. "The Economic Effects of the Tax Reform Act of 1986," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 589-632, June.
    28. Mikesell, John L., 1997. "The American Retail Sales Tax: Considerations on Their Structure, Operations, and Potential as a Foundation for a Federal Sales Tax," National Tax Journal, National Tax Association;National Tax Journal, vol. 50(1), pages 149-165, March.
    29. Michael Keen, 1997. "Peculiar institutions: A British perspective on tax policy in the United States," Fiscal Studies, Institute for Fiscal Studies, vol. 18(4), pages 371-400, November.
    30. J. K. Scholz, "undated". "The earned income tax credit: Participation, compliance, and antipoverty effectiveness," Institute for Research on Poverty Discussion Papers 1020-93, University of Wisconsin Institute for Research on Poverty.
    31. Bev Dahlby, 1996. "Fiscal externalities and the design of intergovernmental grants," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 3(3), pages 397-412, July.
    32. Daniel R. Feenberg & Andrew W. Mitrusi & James M. Poterba, 1997. "Distributional Effects of Adopting a National Retail Sales Tax," NBER Chapters, in: Tax Policy and the Economy, Volume 11, pages 49-90, National Bureau of Economic Research, Inc.
    33. Mikesell, John L., 1997. "The American Retail Sales Tax: Considerations on Their Structure, Operations, and Potential as a Foundation for a Federal Sales Tax," National Tax Journal, National Tax Association, vol. 50(1), pages 149-65, March.
    34. R. Glenn Hubbard & William M. Gentry, 1996. "Distributional Implications of a Consumption Tax," Books, American Enterprise Institute, number 52019, September.
    35. Ravallion, Martin, 1984. "How Much Is a Transfer Payment Worth to a Rural Worker?," Oxford Economic Papers, Oxford University Press, vol. 36(3), pages 478-489, November.
    36. Chamley, Christophe, 1986. "Optimal Taxation of Capital Income in General Equilibrium with Infinite Lives," Econometrica, Econometric Society, vol. 54(3), pages 607-622, May.
    37. William M. Gentry & R. Glenn Hubbard, 1997. "Distributional Implications of Introducing a Broad-Based Consumption Tax," NBER Chapters, in: Tax Policy and the Economy, Volume 11, pages 1-48, National Bureau of Economic Research, Inc.
    38. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-927, October.
    39. Scholz, John Karl, 1996. "In-Work Benefits in the United States: The Earned Income Tax Credit," Economic Journal, Royal Economic Society, vol. 106(434), pages 156-169, January.
    40. Bayoumi, Tamim & Masson, Paul R., 1995. "Fiscal flows in the United States and Canada: Lessons for monetary union in Europe," European Economic Review, Elsevier, vol. 39(2), pages 253-274, February.
    41. Diamond, Peter A & Mirrlees, James A, 1971. "Optimal Taxation and Public Production II: Tax Rules," American Economic Review, American Economic Association, vol. 61(3), pages 261-278, June.
    42. Holtzblatt, Janet & McCubbin, Janet & Gillette, Robert, 1994. "Promoting Work Through the EITC," National Tax Journal, National Tax Association;National Tax Journal, vol. 47(3), pages 591-607, September.
    43. Diamond, Peter A & Mirrlees, James A, 1971. "Optimal Taxation and Public Production: I--Production Efficiency," American Economic Review, American Economic Association, vol. 61(1), pages 8-27, March.
    44. Whitehouse, Edward, 1996. "Designing and Implementing In-Work Benefits," Economic Journal, Royal Economic Society, vol. 106(434), pages 130-141, January.
    45. Lucas, Robert E, Jr, 1990. "Supply-Side Economics: An Analytical Review," Oxford Economic Papers, Oxford University Press, vol. 42(2), pages 293-316, April.
    46. Murray, Matthew N., 1997. "Would Tax Evasion and Tax Avoidance Undermine a National Retail Sales Tax?," National Tax Journal, National Tax Association, vol. 50(1), pages 167-82, March.
    47. Scholz, John Karl, 1994. "The Earned Income Credit: Participation, Compliance, and Antipoverty Effectiveness," National Tax Journal, National Tax Association;National Tax Journal, vol. 47(1), pages 63-87, March.
    48. Peltzman, Sam, 1980. "The Growth of Government," Journal of Law and Economics, University of Chicago Press, vol. 23(2), pages 209-287, October.
    49. V. Joseph Hotz, 2003. "The Earned Income Tax Credit," NBER Chapters, in: Means-Tested Transfer Programs in the United States, pages 141-198, National Bureau of Economic Research, Inc.
    50. Peltzman, Sam, 1980. "The Growth of Government," Journal of Law and Economics, University of Chicago Press, vol. 23(2), pages 209-287, October.
    51. Mervyn A. King, 1980. "Savings and Taxation," NBER Working Papers 0428, National Bureau of Economic Research, Inc.
    52. Myers, Gordon M., 1990. "Optimality, free mobility, and the regional authority in a federation," Journal of Public Economics, Elsevier, vol. 43(1), pages 107-121, October.
    53. William Gale, 1997. "What can America learn from the British tax system?," Fiscal Studies, Institute for Fiscal Studies, vol. 18(4), pages 341-369, November.
    54. Gordon, Roger & Kalambokidis, Laura & Slemrod, Joel, 2004. "Do we now collect any revenue from taxing capital income?," Journal of Public Economics, Elsevier, vol. 88(5), pages 981-1009, April.
    55. James R. Hines & Richard H. Thaler, 1995. "The Flypaper Effect," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 217-226, Fall.
    56. Lindert, Peter H., 1996. "What Limits Social Spending?," Explorations in Economic History, Elsevier, vol. 33(1), pages 1-34, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Boadway, Robin & Marceau, Nicolas & Sato, Motohiro, 1999. "Agency and the design of welfare systems," Journal of Public Economics, Elsevier, vol. 73(1), pages 1-30, July.
    2. Michael Keen, 1997. "Peculiar institutions: A British perspective on tax policy in the United States," Fiscal Studies, Institute for Fiscal Studies, vol. 18(4), pages 371-400, November.
    3. Boadway, Robin & Cuff, Katherine & Marceau, Nicolas, 2003. "Redistribution and employment policies with endogenous unemployment," Journal of Public Economics, Elsevier, vol. 87(11), pages 2407-2430, October.
    4. Matti Tuomala & Hannu Tanninen, 2005. "Inherent Inequality and the Extent of Redistribution in OECD Countries," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 3(01), pages 48-53, April.
    5. Kaplanoglou, Georgia & Newbery, David Michael, 2003. "Indirect Taxation in Greece: Evaluation and Possible Reform," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 10(5), pages 511-533, September.
    6. William Gale, 1997. "What can America learn from the British tax system?," Fiscal Studies, Institute for Fiscal Studies, vol. 18(4), pages 341-369, November.
    7. Matti Tuomala & Hannu Tanninen, 2005. "Inherent Inequality and the Extent of Redistribution in OECD Countries," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 3(1), pages 48-53, 04.
    8. repec:ces:ifodic:v:3:y:2005:i:1:p:14567536 is not listed on IDEAS
    9. Robin Boadway, 1998. "Redistributing Smarter: Self-Selection, Targeting and Non-Conventional Policy Instruments," Canadian Public Policy, University of Toronto Press, vol. 24(3), pages 365-369, September.
    10. William Gale, 1997. "What can America learn from the British tax system?," Fiscal Studies, Institute for Fiscal Studies, vol. 18(4), pages 341-369, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Michael Keen, 1997. "Peculiar institutions: A British perspective on tax policy in the United States," Fiscal Studies, Institute for Fiscal Studies, vol. 18(4), pages 371-400, November.
    2. George R. Zodrow, 2019. "Should Capital Income Be Subject to Consumption-Based Taxation?," World Scientific Book Chapters, in: George R Zodrow (ed.), TAXATION IN THEORY AND PRACTICE Selected Essays of George R. Zodrow, chapter 5, pages 131-168, World Scientific Publishing Co. Pte. Ltd..
    3. Stacy Dickert-Conlin & Douglas Holtz-Eakin, 1999. "Employee-Based versus Employer-Based Subsidies to Low-Wage Workers: A Public Finance Perspective," JCPR Working Papers 79, Northwestern University/University of Chicago Joint Center for Poverty Research.
    4. Iwona B. Franczak & Amy C. Lutz, 2024. "How Can We Improve Educational Experiences for Refugee Students in Poland?," Center for Policy Research Policy Briefs 14, Center for Policy Research, Maxwell School, Syracuse University.
    5. Mehrdad Vahabi & Philippe Batifoulier & Nicolas Silva, 2020. "A theory of predatory welfare state and citizen welfare: the French case," Public Choice, Springer, vol. 182(3), pages 243-271, March.
    6. repec:hal:cepnwp:hal-02073247 is not listed on IDEAS
    7. Persson, Torsten & Tabellini, Guido, 2002. "Political economics and public finance," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 24, pages 1549-1659, Elsevier.
    8. Randall Holcombe, 2005. "Government growth in the twenty-first century," Public Choice, Springer, vol. 124(1), pages 95-114, July.
    9. Thomas A. Garrett & Russell M. Rhine, 2006. "On the size and growth of government," Review, Federal Reserve Bank of St. Louis, vol. 88(Jan), pages 13-30.
    10. Joel Slemrod & Jon Bakija, 2000. "Does Growing Inequality Reduce Tax Progressivity? Should It?," NBER Working Papers 7576, National Bureau of Economic Research, Inc.
    11. Wolfgang Ochel, 2002. "Welfare to Work in the US: A Model for Germany?," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 59(1), pages 91-119, February.
    12. Weijie Luo, 2022. "Inequality and growth in the twenty‐first century," Scottish Journal of Political Economy, Scottish Economic Society, vol. 69(4), pages 345-366, September.
    13. Lans Bovenberg, A. & Jacobs, Bas, 2005. "Redistribution and education subsidies are Siamese twins," Journal of Public Economics, Elsevier, vol. 89(11-12), pages 2005-2035, December.
    14. Günther G. Schulze & Heinrich W. Ursprung, 1999. "Globalisation of the Economy and the Nation State," The World Economy, Wiley Blackwell, vol. 22(3), pages 295-352, May.
    15. Timothy M. Smeeding & Katherin Ross Phillips & Michael O'Connor, 1999. "The EITC: Expectation, Knowledge, Use, and Economic and Social Mobility," Center for Policy Research Working Papers 13, Center for Policy Research, Maxwell School, Syracuse University.
    16. Saez, Emmanuel & Stantcheva, Stefanie, 2018. "A simpler theory of optimal capital taxation," Journal of Public Economics, Elsevier, vol. 162(C), pages 120-142.
    17. Støstad, Morten Nyborg & Cowell, Frank, 2024. "Inequality as an externality: Consequences for tax design," Journal of Public Economics, Elsevier, vol. 235(C).
    18. Gerhard Glomm & Juergen Jung, 2013. "The Timing of Redistribution," Southern Economic Journal, John Wiley & Sons, vol. 80(1), pages 50-80, July.
    19. Charles B. Blankart, 2002. "Steuern als Preise - Eine finanzwissenschaftliche Untersuchung mit einer Anwendung auf die EU-Zinsbesteuerung," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 138(I), pages 19-38, March.
    20. Gordon, Roger H, 1992. "Can Capital Income Taxes Survive in Open Economies?," Journal of Finance, American Finance Association, vol. 47(3), pages 1159-1180, July.
    21. Slemrod, Joel, 1990. "Optimal Taxation and Optimal Tax Systems," Journal of Economic Perspectives, American Economic Association, vol. 4(1), pages 157-178, Winter.

    More about this item

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ntj:journl:v:50:y:1997:i:4:p:779-802. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: The University of Chicago Press (email available below). General contact details of provider: https://www.ntanet.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.