PECULIAR INSTITUTIONS - A BRITISH PERSPECTIVE ON TAX POLICY IN THE UNITED-STATES

By both effect and example, tax policy in the United States has a huge impact on the rest of the world. This paper explores five features of the American tax system that seem, from a British and European perspe ctive, to be both especially peculiar and potentially instructive. The se are the remarkably low overall level of taxation; the absence of a value-added tax (or any other major general national tax on consumptio n); the absence of any explicit interstate equalization; the marginal subsidization of low earnings under the earned income tax credit; and the fragmentation of power in policymaking, an important aspect of whi ch is the role played by the Constitution.