In the public sector, no tool adjusts spending to changing conditions. In the current recession, many states have decreased revenues, but little decreased spending has been seen. This pattern raises a difficult question: How do states correct for the inflexibility in spending cuts?

In this Mercatus on Policy, Richard Williams and Katelyn Christ of the Mercatus Center discuss the dangers and shortfalls of excise taxes.

Instead of attempting a short-term fix of amplifying the grant system through an emergency stimulus package, the federal government should work to make state and local governments accountable for their own spending decisions. This means reducing states’ and localities’ reliance on federal funding for local priorities and allowing local activities to be addressed by the appropriate mechanisms: state and local governments and the private and philanthropic sectors.

This article is an exploratory comparative analysis of the spread the "flat tax" in post communist Eastern Europe. The paper overviews the flat tax as a public policy prescription, discusses the various arguments that underpin its potential reception, introduces and applies a synthetic comparative method to study its spread in nine Eastern Europe countries, and draws several conclusions regarding the conditions associated to the implementation of this economic policy idea while suggesting further research directions.