New book from Rice economist examines theory and practice of taxation

A new book of essays by a Rice University economist examines the many facets of taxation at the federal, state and local levels.

George Zodrow. Credit: Rice Department of Economics.

“Taxation in Theory and Practice: Selected Essays of George R. Zodrow” (World Scientific Publishing Company Inc., 660 pages, $158) includes 19 scholarly articles written by the Rice economics chair over the course of his 40-year career. In addition to discussing current tax mechanisms, Zodrow discusses the relative merits of alternative forms of taxation, their effects and the thorny issues associated with implementing reform.

“I have spent my entire academic career at Rice, my undergraduate alma mater, which has provided an ideal environment for me to teach and conduct my research on taxation,” Zodrow said. “My early research was primarily theoretical but, sparked in large part by a year spent at the U.S. Department of the Treasury during the preparation of the two reports that led to the much-celebrated Tax Reform Act of 1986 as well as numerous subsequent tax policy consulting projects, my work took a more applied bent that is reflected in some of the more recent publications in this volume. In addition, I have in recent years worked with John Diamond of Rice’s Baker Institute (for Public Policy) on a computable general equilibrium model that we and others, including the U.S. Joint Committee on Taxation and the U.S. Treasury, have used to simulate the macroeconomic and distributional effects of tax reforms in the United States.”

The book reflects Zodrow’s most important contributions to the theory and practice of taxation. The first of its five sections covers optimal tax reform, an analysis of the best ways to implement tax reforms considering not only the gains but also the losses they impose. The next two sections examine alternative forms of taxation: consumption-based taxes that are often discussed as potential models for U.S. reform, and more conventional income taxes as applied in both the United States and in developing countries. The final two sections examine state and local tax policy, including the effects of local property taxes and competitive tax practices between state and local governments that have led to declining tax rates and lower public services worldwide.

“The motivating force behind these articles is the conviction that for government to tax appropriately, systems of taxation must be profoundly understood,” wrote Peter Mieszkowski, a professor emeritus of economics at Rice and longtime colleague of Zodrow’s who also specializes in public finance, in the book’s foreword. “This volume is a giant step in that direction.”

The book cover was designed by Zodrow’s daughter, Laura. More information about the book is available online at https://www.worldscientific.com/worldscibooks/10.1142/11407