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    Ideological viewpoints in public finance and their effects

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    I am trying to understand how ideological viewpoints found in public finance works and how they affect government at the federal, state, and local levels.

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    No problem here at all. I gave you tons of ideas. Thank you for using BrainMass!

    Ideological viewpoints structure, compare the ideological viewpoints found in public finance and how they affect government at the federal, state, and local levels. How may these viewpoints affect decisions pertaining to public finance?

    Well, you're in very good hands here. This is one of these areas I know too much about, so I tend to go on and on. Plus I'm on my 9th cup of coffee today.

    There are as many approaches to ideology here as there are people involved. The main division is between those who reject the positive role of the state (libertarians) and those who accept it (liberals). This mirrors a similar division between those who hold that the market is more rational in allocating goods and services, while the state is essentially a parasite without competition. Those who accept the positive role of the state hold that the market has many unintended consequences and can cause economic irrationality as a result. Vaguely, this is representative of the libertarian and left-liberal points of view. Be careful with these labels, since in Europe, they mean very different things than they do in the US.
    This is the typical "left right" debate in the US. The libertarian will hold that controlling the growth of the state and lowering taxes will encourage investment and employment. Taxes are really taking money out of the economy and giving it to the state, that produces nothing. The liberal will hold that the state does produce things of value (public goods, defense, enforcement of contracts, etc) and therefore, it is not irrational to divert money to public goods. The basic argument here is that the market might be efficient in allocating some things, but very poor in allocating others.
    Therefore, the whole thing come down to your view of government and whether or not it is a positive or negative actor in economic life. In this case, there is really no difference between the levels of government, since the arguments are identical in all cases.
    Concerning public finance more specifically, the issues concern the rights of the state to extract money from the population. Of course, taxes are collected only through the threat of force. At the time of the founding of the Constitution, the idea of an "income" tax was seen as a threat to liberty. It was only passed in 1915, and even then, in secret. Possible ideological approaches are these:

    if you argue that the person, the self, is the highest goal of society, then the state, which is above the individual, needs to be radically limited in its power. The only justification for forcible extraction of cash are for clear public goods like police or prisons (though there are plenty of arguments that the private sector can offer these goods as well).

    liberty often conflicts with equality and other goods. Stressing freedom above all things requires the state to be very small, only being involved in a few crucial areas of administration. At the same time, concentrated corporate capital is also a threat to liberty. Therefore, ...

    Solution Summary

    The ideological viewpoints in public finance and their effects are given.