PART I Introduction and Background.- 1. Why Study Public Finance?.- 2.Theoretical Tools of Public Finance.- 3.Empirical Tools of Public Finance.- 4. Budget Analysis and Deficit Financing.- PART II Externalities and Public Goods.- 5. Externalities: Problems and Solutions.- 6. Externalities in Action: Environmental and Health Externalities.- 7. Public Goods.- 8. Cost-Benefit Analysis.-9. Political Economy.- 10. State and Local Government Expenditures.- 11. Education.- PART III Social Insurance and Redistribution.- 12. Social Insurance: The New Function of Government.- 13. Social Security.- 14. Unemployment Insurance, Disability Insurance, and Workers’ Compensation.- 15. Health Insurance I: Health Economics and Private Health Insurance.- 16. Health Insurance II: Medicare, Medicaid, and Health Care Reform.- 17. Income Distribution and Welfare Programs.- PART IV Taxation in Theory and Practice.- 18. Taxation: How It Works and What It Means.- 19. The Equity Implications of Taxation: Tax Incidence.- 20. Tax Inefficiencies and Their Implications for Optimal Taxation.- 21. Taxes on Labor Supply.- 22. Taxes on Savings.- 23. Taxes on Risk Taking and Wealth.- 24. Taxation of Business Income.- 25. Fundamental Tax Reform and Consumption Taxation 

Questions to Keep in Mind - Questions at the start of each chapter, alert students to the chapter’s “big ideas,” thus helping them organise the many ideas presented in the chapter
Integrated Applications - The Applications in this text allow students to step back from the main text and appreciate the policy relevance of the material. These applications are integrated directly with the text, rather than set aside, so that students understand the importance of applying the material they are learning
Empirical Evidence Boxes - For instructors who wish to explore in more depth the nature of the empirical findings mentioned in the text, Empirical Evidence boxes are set aside from the main text to explain carefully the research process that generates the major empirical findings in public finance
Integration of Relevant Statistics - Throughout the text, and in a number of graphs and tables, this text presents the statistics about the role of the government that emphasise the importance of this course. It is much easier to explain to students why they should care about social insurance, for example, when they clearly see graphics that illustrate the rise in that activity as a share of the U.S. government
Quick Hints - Throughout the text are a variety of highlighted Quick Hints to emphasize the intuition of key theoretical points that students often find difficult
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All statistics, data-related tables and figures, and applications have been updated completely to reflect the most recent available data

Revisions to the Application and Empirical Evidence boxed features