Public Finance

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General course information and requirements

Semester: Fall 2006
Course: Economics 331, Public Finance
Instructor: Dr. Stonebraker
Office: 401 Thurmond
Office phone: 323-2488
E-mail address: stonebrakerr@winthrop.edu
Office hours: MW 3:30-5 p.m., TR 9-11 a.m., F 12:30-1:30 p.m.
                       Other times are available by appointment.

Objectives:

After completing this course, students should be able to:

1. Describe the major tax and expenditure items of the U.S. government.
2. Discuss the economic rationale for government involvement in the economy.
3. Apply economic analysis to political decision making.
4. Discuss the impact of taxes on efficiency and equity in the economy.
5. Analyze current issues in public finance.

Text:

Public Finance and Public Policy, by Jonathan Gruber, Worth Publishers, 2005. The website for the textbook (http://www.worthpublishers.com/gruber) contains chapter outlines, flash cards for key terms, power point slides for each chapter and, for those willing to register, self-testing quizzes.

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Grades will be determined by the following:

• Paper                              10%
• Class participation              5%
• Exam with lowest grade:   25%
• Other two exams:             30% each

Exams:

Exam questions will stress analysis rather than factual information and will be based on the material presented in class. You will be expected to write short essay/explanation answers and to solve graphical and numerical problems. Students caught copying/cheating will be dealt with harshly.  The final exam will be given at 8 a.m. on Monday, December 11 and will include some specified review material. You may use non-programmable calculators during exams, but graphing calculators, cell phone calculators or other programmable calculators are NOT allowed.

The approximate grading scale for exams will be:

        85 - 100%      A
        70 - 84%        B
        60 - 69%        C
        50 - 59%        D
          0 - 49%        F

Make-up policy:

Make-up exams will be given to students with what I judge to be a valid excuse. Needing more time to study is not a valid excuse. If you cannot make an exam I expect to be notified as quickly as possible, preferably before the exam. Students who do not notify me in a timely manner should not expect a make-up exam.

Paper:

In addition to exams, you will write a short paper on a tax issue that we do not cover in class. This will be 10% of your grade.  For details, click on the assignment.

Class participation:

Especially in a small class, participation is a critical part of the learning experience.  The first prerequisite of adequate participation is attendance: both physical and mental attendance.  I expect you to pay attention, ask and answer questions as appropriate, and interact with your classmates and instructor in a meaningful way.  This will count for 5% of your final grade.  

Attendance policy:

 

You are expected to attend every class on time and are responsible for all class material whether or not you attend.  Following  the Winthrop University Attendance Policy, students may not miss as many as 1/4 of the class meetings.  Those withdrawing before the withdrawal deadline will receive a grade of N.  Those missing as many as 1/4 of the classes who do not withdraw by the deadline will receive a grade of F, or U, whichever is appropriate.

Course withdrawal:

 

Friday, October 20 is last day to withdraw from a full fall semester course.  (Automatic N grade is issued.)  Students may not withdraw from a course after this date without documented extenuating circumstances.

Students with Disabilities:

 

Winthrop University is dedicated to providing access to education.  If you have a disability and need classroom accommodations, please contact Gena Smith, Coordinator, Services for Students with Disabilities, at 323-3290, as soon as possible.  Once you have your Professor Notification Form, please tell me so that I am aware of your accommodations well before the first assignment.

Course Outline

I.   Introduction: Overview of Government Finance

A. Revenue and expenditures

     Chapter 1

B. Deficits and debt

     Chapter 4

II.  Theory of Government Economic Activity

A. Markets and economic efficiency

     Chapter 2

B. Externalities and public goods

     Chapters 5 (omit section 5.4 on pp. 132-141) and 7

Exam #1: Approximately September 25

D. Public choice

     Chapter 9

III.  Government Activities: Uses of Funds

A. Education

     Chapter 11 (omit section 11.4 on pp. 290-295)

B. Social insurance

     Chapter 12 (omit section 12.4 on pp. 316-320) and chapter13 (omit section 13.3 on pp. 346-352)

C. Health care

     Chapter 15 and section 16.6 (pp. 441-448) in chapter16

IV.  Government Activities: Sources of Funds

A. Theory of taxation

     Chapters 18, 19 and 20 (omit section 20.4 on pp. 572-577)

     Positional Externalities

B. Taxes on labor

     Chapter 21 (omit section 21.3 on pp. 592-600)

C. Taxes on savings

     Chapter 22 (pp. 607-615 only)

D. Tax reform

     Chapter 25

V.  Issues in Public Finance (if you are lucky)

A. Income redistribution and welfare

     Chapter 7

B. Fiscal federalism

     Chapter 10