Course Title: English for Public Finance and Tax

Course Code: 02000084

Credits: 2

Prerequisite: Economics of the Public Sector，Micro-Economics，Macro-Economics

Majored in: Public Finance, Taxation

Course Description: This course is designed to focus on the basic concepts and theories of public finance, such as Vertical Equity vs Horizontal Equity, Wagner's law and voting by foot, which would be illustrated through case analysis in a variety of provider settings. Course work also involves using the developed methods to analyze some economic problems in the real world. By studying this course, students should understand and get the basic theories and could analysis some classic cases. Students are also required to learn by heart some of the contents of tax system in contemporary China, such as VAT, custom duty, income tax, stamp tax, etc.

Schedule and Contents: Chapter I, Individual, Market and Government, including market failures, the economic role of the government, government failures, differences in views of how the economy behaves; Chapter II, public choice and public pricing, including the problem of preferences revelation, the differences between economic man hypothesis and political market hypothesis, interest group theory, rent-seeking theory, average cost pricing and marginal cost pricing, two-part pricing and peak-load pricing; Chapter III: fiscal expenditure, including social stability hypothesis and MR model, the media voter theory, equity-efficient trade-off, the size and structure of fiscal expenditure in China, the efficient of China's fiscal expenditure; Chapter IV: tax analysis, including the forms of taxation, effect of taxes borne by consumers/producers, effect of uniform/ progressive taxation of labor income; Chapter V: inter-government fiscal relationship, including Fiscal Decentralization, Government Competition, the efficiency variance between central government and local government.

The students should also grasp the spirit of the basic law of each part. For example, after completing Chapter III, students could analysis the positive and negative effect of different expenditure from scale, structure and efficiency; could analysis the economic and welfare effect of different kinds of tax; after completing Chapter IV; they should master theories of decentralization and government competition, the differences between the first and the second generation of the decentralization theory, the horizontal competition among local government and the vertical competition between central government and local government, and could analysis the efficiency variance of public goods between central government and local government, after completing Chapter V.

Some classic papers are as follows:

The Pure Theory of Public Expenditure, Paul A. Samuelson, the Review of Economic and Statistics, Volume 36, Issue 4(Nov., 1954), 387-389.

The Problem of Social Cost, R. H. Coase, Journal of Law and Economics, Vol. 3. (Oct., 1960), pp. 1-44.

The Tragedy of the Commons, Garrett Hardin, Science, 1968, Vol. 162(13): 1243-1248.

Optimal greenhouse gas reductions and tax policy in the "DICE" model, Nordhaus, W. D., 1993, American Economic Review, 83, pp. 313-317.

Beyond Markets and States: Polycentric Governance of Complex Economic Systems. Ostrom E., 2010, American Economic Review 2010, 100(6): 1–33.

An Economic Theory of Clubs, James M. Buchanan, Economica, Vol. 32, No. 125 (Feb., 1965), pp. 1-14.

The Theory of Public Utility Pricing and Its Application, R. H. Coase, The Bell Journal of Economics and Management Science, Vol.1, No. 1(Spring, 1970), 113-128.

A Pure Theory of Public Expenditure, Charles M. Tiebout, the journal of Political Economy, Volume 64, Issue 5(Oct, 1956), 416-424.

A Contribution to the Theory of Taxation. Frank Ramsey, 1927. Economic Journal, vol. 37(145), pp. 47–61.

A Classical Tax-Subsidy Problem. Gerard Debreu. Econometrica, Vol. 22, No. 1 (Jan., 1954), pp. 14-22.

Approaches to a fiscal theory of political federalism. Musgrave Richard (1961), reprinted in Musgrave (1986), Public Finance in a Democratic Society, Collected Papers, Vol. 2, Wheatsheaf Books, Brighton, UK.

Taxation in a Federal System: The Tax Assignment Problem, Oates, W. E. (1996). Public Economics Review 1, 35–60.

Federalism and the Soft Budget Constraint, Qian and Roland, American Economic Review, December 1998, 88（5）, pp. 1143-1162.

Toward a Second-generation Theory of Fiscal Federalism. Oates, W. E., 2005, International Tax and Public Finance, 12, pp. 349~373.