In a perfect market economy, the cost of raising another euro of tax revenue equals one. However, once distortionary taxes on goods and factors are introduced, the marginal cost of public funds, MCPF, typically deviates from one. Often it exceeds one, but one can also find cases where it falls short of one. This Element introduces the concept of the MCPF, sketches its history, and discusses a number of applications. It does this by undertaking economic evaluations of public sector projects involving a pure public good. An important distinction in the literature relates to where the government has access to lump-sum taxation versus where it must rely on changing a distortionary tax. These are often unit taxes or proportional taxes. Sometimes they are even introduced to alleviate a problem. An example is a tax on emissions of greenhouse gases. This title is also available as Open Access on Cambridge Core.
| ISBN: | 9781009620482 |
| Publication date: | 29th May 2025 |
| Author: | PerOlov Johansson, Bengt Kriström |
| Publisher: | Cambridge University Press |
| Format: | Paperback |
| Pagination: | 75 pages |
| Series: | Elements in Public Economics |
| Genres: |
Public finance and taxation Local taxation, charges, public sector pricing Labour / income economics |
In a perfect market economy, the cost of raising another euro of tax revenue equals one. However, once distortionary taxes on goods and factors are introduced, the marginal cost of public funds, MCPF, typically deviates from one. Often it exceeds one, but one can also find cases where it falls short of one. This Element introduces the concept of the MCPF, sketches its history, and discusses a number of applications. It does this by undertaking economic evaluations of public sector projects involving a pure public good. An important distinction in the literature relates to where the government has access to lump-sum taxation versus where it must rely on changing a distortionary tax. These are often unit taxes or proportional taxes. Sometimes they are even introduced to alleviate a problem. An example is a tax on emissions of greenhouse gases. This title is also available as Open Access on Cambridge Core.
The Marginal Cost of Public Funds features in the following genres: Public finance and taxation, Local taxation, charges, public sector pricing, Labour / income economics
The Marginal Cost of Public Funds is available in Hardback, Paperback
The Marginal Cost of Public Funds was written by PerOlov Johansson, Bengt Kriström and published by Cambridge University Press
The Marginal Cost of Public Funds has 75 pages
Yes it is part of Elements in Public Economics series
£29.66