This text provides a balanced treatment of both theory and practice for courses in public finance, public sector economics, cost-benefit analysis, public choice or public policy. Features: * Thoroughly covers both tax and expenditure topics, including extensive discussion of current scholarly research as well as recent examples. * An entire chapter on health care includes discussion of current policy issues regarding health care reform (Ch. 13). * Current and complete treatment of deficits (Chapter 17) integrates discussions of previous chapters and provides students with a lively treatment of the topic. * The entire chapter on theory and use of off-budget credit and insurance policies is unique in a public finance text. * Many boxed items examine leading current policy issues. * Extensive use of graphs shows historical and current trends. * A complete appendix on microeconomic theory makes the text useful for several levels of teaching. * Examination of major changes in income tax laws lends appreciation for past reform as well as current reform issues.