Tax revenue is a function of laws and administration as well as economic activity. Four different theories purport to explain revenue-raising in contemporary Western nations: universal abstractions about economic systems; national culture: tax-specific characteristics; avoiding political costs through political inertia. OECD data on taxation in Western nations since 1955 show that national tax systems do not have sufficient in common to validate universalistic generalizations Tax-specific influences can be identified only for a few major sources of revenue. The inertia persistence of substantial national distinctiveness reflects a non-decision making approach to tax policy by politicians. The strategy is to rely primarily upon revenue-buoyant taxes authorized by past legislation rather than risk the political blame for introducing new taxes to raise large amounts of needed additional revenue.

This paper explores intertemporal relations between innovations in government receipts and expenditures, by type and in total, at federal and state-local levels in the United States over the period 1955–82. A structural model is specified with tax and spending components as endogenous variables. After estimation with full information maximum likelihood techniques, residuals derived from the reduced form equations are used in causality tests. These tests show that where there is an indication of causality, spending tends to lead taxes. The lesson learned from past data thus appears to be that changing aggregate tax rates does not cause spending to change. Tax initiatives provide little leverage if changes in the growth of government are intended.

This article presents the findings of a public opinion survey of the level of taxation in Sweden. The study demonstrates that opinions depend to a large extent on the framing of the problem. On general questions regarding taxes, the answers are usually negative. But when asked about both taxes and benefits, people normally express a positive attitude to both. The opinions about different kinds of taxes vary greatly, but the variation does not correspond to the predictions of the fiscal illusion theory. Opinions about taxes can be assigned to three underlying attitude dimensions. A comparison with an earlier Swedish survey shows that discontent with the level of taxation has not increased since the 1960s, with but one exception, marginal taxes.

The effects of political and macroeconomic influences in determining the principal taxes in the United Kingdom since 1948 are examined here. Basic models of tax determination – policy initiative, macroeconomic determination and consumer preference – are tested. Causal path analysis is used to answer the question: Which is more important in determining tax revenues: the policy initiatives of governments, or circumstances in the economy which in the short term may be outside governmental control? The results demonstrate that for most taxes policy initiatives to alter tax rates and bases are much less important to revenue yield than underlying trends in the economy. The continuing strength of these macroeconomic secular trends circumscribes attempts by British policymakers to depart radically from the existing pattern of taxation.

After a sharp increase, the public debt of French local communities has been stabilized in real terms: its amount reached 54 per cent of total public debt in 1980. In the French institutional framework, local government borrowing policy is under the tight control of central agencies. An econometric model of the borrowing behaviour of local governments since 1965 is presented; it emphasizes the role of internal determinants of local debt (needs for investment, self-financing ability of governments), external constraints (e.g. interest rates and the financial resources of lenders, such as households savings), and finally the impact of macroeconomic policy measures from the central government.

Although the term ‘subsidy’ is commonly used in the context of social, industrial, and trade policy, there is no general agreement concerning its precise definition. This paper argues that current usage of the term ‘subsidy’ does not permit us to isolate a distinct policy instrument. Instead, subsidies exist when the tax system fails to accord with specified ‘norms’. Thus, the subsidy turns out to be a normative concept and is defined relative to desired ends. Explicit acceptance of the normative character of subsidies might clarify policy disputes by distinguishing between disagreements over ends, and disagreements about technical relationships.

Not long ago, I found myself at an athletic breakfast. Having long supported a broader-based, lower-rate income tax, with fewer tax preferences, I was dismayed to discover a letter from an administrator requesting all present to protest against the new reform on the grounds that by weakening tax preferences it would reduce contributions to the University in general and sports in particular. To this special interest – all interests are special to those who care about them – one can add, among numerous others, museums, opera companies, and sports franchises. Indeed, until I started writing this review, I was unaware of how tax preferences help increase the salaries of athletes. These franchises make substantial income from box seats bought by corporations that can write them off as business expenses. Absent this subsidy, franchise income, hence allowable salaries, would be less. Do we want to subsidize athletes? Or owners? How is this to be avoided while protecting the busboys, waiters, and other people who depend on the ablity of businessmen to write off meals and drinks?