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Commenting on his collaboration with Geoffrey Brennan on The Power to Tax, James M. Buchanan says that the book is “demonstrable proof of the value of genuine research collaboration across national-cultural boundaries.” Buchanan goes on to say that “The Power to Tax is informed by a single idea—the implications of a revenue-maximizing government.”

Originally published in 1980, The Power to Tax was a much-needed answer to the tax revolts sweeping across the United States. It was a much-needed answer as well in the academic circles of tax theory, where orthodox public finance models were clearly inadequate to the needs at hand.

The public-choice approach to taxation which Buchanan had earlier elaborated stood in direct opposition to public-finance orthodoxy. What Buchanan and Brennan constructed in The Power to Tax was a middle ground between the two. As Brennan writes in the foreword, “The underlying motivating question was simple: Why not borrow the motivational assumptions standard in public-choice theory and put them together with assumptions about policy-maker discretion taken from public-finance orthodoxy?”

The result was a controversial book—and a much misunderstood one as well. Looking back twenty years later, Brennan feels confirmed in the rightness of the theories he and Buchanan espoused, particularly in their unity with the public-choice tradition: “The insistence on motivational symmetry is a characteristic feature of the public choice approach, and it is in this dimension that The Power to Tax and the orthodox public- finance approach diverge.”

"Our basic purpose in this summary chapter is not to support or to reject any one or any set of the various proposals for constitutional reform that have been advanced to impose constraints on government’s fiscal power. Our whole analysis, however, may properly be interpreted as offering analytical argument in support of some appropriately designed set of limits. Our extreme Leviathan model of politics is not critical for this conclusion. This model, which we introduced to allow us to develop our analysis with some logical rigor, may be substantially modified in the direction of more “realistic” political assumptions without undermining the general conclusion in support of constitutional constraints.
To the extent that our analysis bears on “tax reform” at all, it does so with reference to “constitutional tax reform,” and, as noted, with particular reference to “tax limits.” We have little or no interest, here or elsewhere, in proffering our own private and personal advice to existing governments about taxes or indeed about anything else.
If we can succeed in shifting the grounds for debate in tax reform, we shall have opened the way toward the only authentic tax reform worthy of serious consideration."

James M. Buchanan

In 1986 James M. Buchanan (1919-2012) was awarded the Alfred Nobel Memorial Prize in Economic Sciences. Universally respected as one of the founders of the “public choice” school of economics, he is the author of numerous books and hundreds of articles in the areas of public finance, public choice, constitutional economics and economic philosophy. He is best known for such works as The Calculus of Consent, The Limits of Liberty, The Power to Tax, and The Reason of Rules. Buchanan has devoted himself to the study of the contractual and constitutional basis for the theory of economic and political decision making.

See also at Econlib: the Concise Encyclopedia of Economics entry on Buchanan