ABSTRACT
Chapter 5 explores how rent seeking has contributed to current policy debates in the United States. Bailouts for financial firms during the Great Recession, financial-transactions taxes, wealth taxes, and patent reform proposals are explored. An underlying theme of the existing policy proposals is that they look to reduce but not eliminate opportunities to rent seek. Since rent seeking is a social bad, policies should be implemented to eliminate it. Since the private returns to rent seeking tend to be large, highly progressive income taxes are one way to eliminate rent seeking as they reduce the incentive to rent-seek.
