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The Power to Tax: Analytical Foundations of a Fiscal Constitution
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1981
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Optimal TaxationCorporate TaxConstitutional LawFiscal ConstitutionLawPublic ChoiceTax IncentiveFederal Tax PracticePolitical EconomyGenuine Research CollaborationTax PolicyTax LawFiscal PolicyPublic PolicyEconomicsTax AvoidancePublic FinanceFederal TaxFederal Income TaxEconomic PolicyGeoffrey BrennanTax TheoryBusinessTaxationPolitical ScienceTax Management
Power to Tax, co‑authored by Buchanan and Brennan, presents a revenue‑maximizing government framework that bridges public‑choice theory and public‑finance orthodoxy, offering a needed response to tax revolts and academic shortcomings in 1980. The book was controversial and misunderstood, but two decades later Brennan affirms its alignment with public‑choice theory, noting its insistence on motivational symmetry as the key point of divergence from orthodox public‑finance models.
Commenting on his collaboration with Geoffrey Brennan on Power to Tax, James M. Buchanan says that the book is demonstrable proof of the value of genuine research collaboration across national-cultural boundaries. Buchanan goes on to say that Power to Tax is informed by a single idea - the implications of a revenue-maximizing government. Originally published in 1980, Power to Tax was a much-needed answer to the tax revolts sweeping across the United States. It was a much-needed answer as well in the academic circles of tax theory, where orthodox public finance models were clearly inadequate to the needs at hand. The public-choice approach to taxation which Buchanan had earlier elaborated stood in direct opposition to public-finance orthodoxy.What Buchanan and Brennan constructed in Power to Tax was a middle ground between the two. As Brennan writes in the foreword, underlying motivating question was simple: Why not borrow the motivational assumptions standard in public-choice theory and put them together with assumptions about policy-maker discretion taken from public-finance orthodoxy? The result was a controversial book - and a much misunderstood one as well. Looking back twenty years later, Brennan feels confirmed in the rightness of the theories he and Buchanan espoused, particularly in their unity with the public-choice tradition: insistence on motivational symmetry is a characteristic feature of the public choice approach, and it is in this dimension that Power to Tax and the orthodox public-finance approach diverge.