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13 J.L. & Econ. 1 (1970)
Director's Law of Public Income Redistribution

handle is hein.journals/jlecono13 and id is 5 raw text is: DIRECTOR'S LAW OF PUBLIC INCOME
University of Chicago
AL MOST a decade ago Aaron Director proposed a law of public expendi-
tures: Public expenditures are made for the primary benefit of the middle
classes, and financed with taxes which are borne in considerable part by the
poor and rich. The law was empirical, and the present essay seeks not only
to present and illustrate the law (which its inventor refuses to do) but to
offer an explanation for it.
The philosophy of Director's law is as follows. Government has coercive
power, which allows it to engage in acts (above all, the taking of resources)
which could not be performed by voluntary agreement of the members of
a society. Any portion of the society which can secure control of the state's
machinery will employ the machinery to improve its own position. Under a
set of conditions to be discussed below, this dominant group will be the
middle income classes.
A reasonably rigorous demonstration that the state redistributed income
in favor of the middle income classes would require vast empirical studies
of the distribution of public revenues, non-revenue burdens, and benefits,
by income class. We are content here to defend the plausibility of Director's
The distribution of incomes of parents of students in California institu-
tions of higher education is highly skewed toward larger incomes (see
Table 1). California is a relatively wealthy state so somewhat lower incomes
would be received by parents in other states, but no defensible adjustments
of the data would qualify the assertion that the colleges of America are
populated by the children of the middle and upper classes. The rough
estimates of the distribution of state and local taxation by income classes
are persuasive: public provision of higher education redistributes income
from the poorer to the higher income classes.
The same redistributive effect, one may conjecture, was achieved in equal
degree by the public provision of high school education thirty years ago, and

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