Presumptive income taxes in the form of a tax on turnover for SMEs are pervasive as a way to reduce the costs of compliance and administration. We analyze a model where entrepreneurs allocate labor to the formal and informal sectors. Formal sector income is subjected either to a corporate income...

When it comes to gambling taxes, house rules apply. State governments have the prerogative to decide whether to allow lotteries or casinos to operate in their states. This chapter explores the expansion of legal gambling in the United States, focusing on the taxes states get from lotteries and...

Recently, many local governments have tried to fight obesity by taxing “unhealthy” foods, requiring calorie information on menus and vending machines, or placing moratoriums on the establishment of new fast food restaurants. But are all these measures really helping to combat the obesity...

Did you know that some lucky companies have agreements with state and local governments to pay less in taxes than their competitors? These deals are called “economic development tax incentives,” and they are all justified in the name of creating jobs. But do they? Is it the job of the...

You're probably familiar with the earmarking of selective consumption taxes in your state—for example, gas tax revenues may be dedicated to highway funding. However, tax revenues don't always “stick” to the program that they're earmarked to. This chapter shows how earmarked taxes can serve...

Selective consumption taxes can be charged based on a good's value or on the number of units of a good sold. This chapter demonstrates that basing taxes on units purchased may cause consumers to switch to purchasing more expensive or more potent versions of the good, because the tax reduces the...

America's history of selective consumption taxes dates back to the colonial era, when revolutionaries protested against taxes on tea and paper goods. While the Revolution was prompted in part by opposition to selective consumption taxes, this chapter describes how Alexander Hamilton implemented...