Features

New to This Edition

The dynamic public policy environment of the past few years required a thorough updating of most aspects of the book. All statistics, data-related tables and figures, and applications have been updated completely to reflect the most recent available data.In addition, a number of major changes were made throughout the book, including new examples, updating of existing chapter introductions, revisions to the Application and Empirical Evidence boxed features, and a number of new and thoroughly updated text discussions.

EXTENSIVE REVISIONS REFLECTING CURRENT PUBLIC POLICY DEBATES
Any public finance textbook must pay a great deal of attention to issues of externalities and public goods, taxation, and direct government spending, and this book is no exception. Given their importance to the current political discourse, these chapters have undergone the heaviest revisions in this edition:
Chapter 1, “Why Study Public Finance,” Chapter 6, “Externalities in Action: Environmental and Health Externalities,” Chapter 9, “The Political Economy,” Chapter 16, “Health Insurance II: Medicare, Medicaid, and Health Care Reform,” Chapter 17, “Income Distribution and Welfare Programs,” Chapter 18, “Taxation: How it Works and What it Means,” and Chapter 24, “Taxation of Business Income.”

Revisions in the most heavily revised chapters include:

• Chapter 1 coverage of the ACA has been updated to reflect recent developments (including the impact of the Trump administration). Includes all-new Section 1.3: "The Questions of Public Finance are Front and Center in Health Care Debates" (which replaces 5e section 1.3 on why study public finance).
• The discussion of environmental policy has been extensively updated and revised in Chapters 5 and 6. The discussion of Kyoto has shifted to more current coverage of the Paris Agreement, and there is a new overview of the positions upheld by both sides of the global warming debate in Chapter 5. The Chapter 6
  opener has been revised to address Trump administration positions on environmental policy (C02 emissions in particular) with regard to the EPA and, in particular, the Obama-era Clean Power Plan (CPP). Other changes to Chapter 6 include a new running example on particulate emissions (which replaces the example on acid rain), and a new section: "The Paris Agreement and the Future" which covers the details and impact of that global agreement.
• Chapter 9 now includes an entirely new section: "Increasing Polarization in American Politics" that documents the dramatic polarization in the US. System and provides a detailed discussion of the leading
  explanations for this divergence across parties. The chapter now includes the key term: gerrymandering,
  and a discussion of its implications, and new coverage on the Trump administration’s interest in ending the
  earmarks ban.
• The discussion and data in both of the health care chapters (Chapters 15 and 16) have been thoroughly updated: on GDP, ACA, health care expenditures in the U.S. and globally, the high cost of medication, health-insurance costs, and more. New coverage of inefficiencies in the U.S health care system, has been
  added in Chapter 15. In Chapter 16, coverage of the ACA has been updated throughout, and the section on
  ";Early Evidence on the Effects of the ACA" has been thoroughly revamped and updated. And there is a new section: "The ACA Runs into Trouble."
• Chapter 17 has been updated to reflect recent debates over redistribution policy in the United States, in particular including an entirely new section on the concept of “Universal Basic Income,” including relevant facts and a new empirical application. 
• The Chapter 18 opener has been revised to cover Trump’s 2017 tax reform, and the chapter itself has been revised to include details of the law and an analysis of its impact, with details on changes to the CTC and coverage of alternative proposals. Chapter 24 now reflects recent changes to the tax code: there’s a new opener on the 2017 Trump tax overhaul and a new section on the Treatment of International Corporate
  Income.