The excess burden of a tax is the diminution of utility above that which would have occurred had the tax been collected as a lump sum. Usually, excess burden is measured by a method which relies on a second-order approximation to an arbitrary utility function. In this paper, excess burdens are computed using explicit utility functions and the results compared with those obtained from the second-order approximation.

This paper analyzes U.S. time-series data in order to study the determinants of the choice between renting and homeownership. Special attention is focused upon changes in the relative prices of owning and renting induced by provisions of the federal personal income tax. The results suggest that about one-quarter of the growth in the proportion of homeowners in the post-World War II period is a consequence of the tax system's favorable treatment of owner-occupied housing.

The authors examine survival rates of entrepreneurial enterprises and their growth, conditional on surviving. Their focus is on whether liquidity constraints increase the likelihood of entrepreneurial failure. The empirical strategy is based on the following logic: If entrepreneurs cannot borrow to attain their profit-maximizing levels of capital, then entrepreneurs with substantial personal financial resources will be more successful than those without. The authors examine the behavior of a group of sole proprietors who received substantial inheritances. The results are consistent with the notion that liquidity constraints exert a noticeable influence on the viability of entrepreneurial enterprises.