Richard Musgrave, 96; economist advised U.S., foreign governments

Economist Richard Musgrave, who advised governments both domestic and foreign on public finance and taxation, has died. He was 96.

Musgrave died Monday at Dominican Hospital in Santa Cruz, according to a spokeswoman at UC Santa Cruz, where he was an adjunct professor from 1981 to 2004. He had moved to Santa Cruz after spending 16 years at Harvard University, leaving with the title of professor emeritus.

“Richard Musgrave was a giant, a towering figure who transformed the field of public economics,” David Cutler, a Harvard economics professor, said in a statement.

Musgrave made headlines in the 1980s by advocating an increase in personal income taxes to reduce the federal deficit.

“In a democratic society,” he told the Washington Post in 1989, “it is indecent to end up with a top bracket rate of only 28%. A rate of 37% to 40% in the upper brackets is a fair social price to be paid in a market economy. If it isn’t paid there, it will be paid somewhere else.”

He preferred raising income taxes over imposing so-called sin taxes on tobacco or liquor.

“The income tax as a direct tax is highly visible to the taxpayer and hence a steady reminder of the quality of public service that should be provided in return,” he said in a 1989 report on public finance.

Musgrave began advising governments in the 1940s, leading tax reform commissions in Colombia and Bolivia and advising governments in Chile, Myanmar (formerly Burma), Japan and South Korea, according to Harvard.

He also served as a consultant to the U.S. Treasury, the Federal Reserve’s board of governors and the World Bank.

Among his influential books were “The Theory of Public Finance: A Study in Public Economy,” published in 1958, and “Public Finance in Theory and Practice,” written with his wife, Peggy Boswell Musgrave, and published in 1973.

Born Dec. 14, 1910, in Koenigstein, Germany, Richard Abel Musgrave earned an undergraduate degree from the University of Heidelberg in 1933 and received his doctorate from Harvard in 1937.

Musgrave was an instructor in economics at Harvard before a stint at the Federal Reserve from 1941 to 1947. He went back to teaching at Swarthmore College, the University of Michigan, Johns Hopkins University and Princeton University before returning to Harvard in 1965 as an economics professor.

He is survived by his wife, who is an emeritus professor of economics at UC Santa Cruz, and three stepchildren.