IDEAS home Printed from https://ideas.repec.org/a/kap/pubcho/v49y1986i3p283-294.html
   My bibliography  Save this article

An empirical analysis of state and local tax structure in the context of the Leviathan model of government

Author

Listed:
  • Michael Nelson

Abstract

This paper has investigated the ability of an extreme and relatively simple model of political behavior to explain the level of revenues generated by state and local governments. In general, the behavior of these governments appears to be at least consistent with many of the fiscal outcomes predicted by the Leviathan theory. Several, although not all, of the specific Leviathan theory hypotheses considered received empirical support. The evidence was consistent with the hypothesis that states utilizing comprehensive tax bases, especially a personal income tax, can be expected to generate higher levels of aggregate revenues. Strong support was also observed for the contention that intergovernmental competition by general-purpose substate governments may serve as a substitute for constitutional constraints in limiting the revenue generating power of local governments. Despite the consistency of the results with the Leviathan theory, caution must be exercised in reaching the conclusion that states are generating a surplus of funds for the discretionary use of governmental decision makers — a fundamental proposition of this theory. Conclusive evidence would require that the demand for locally financed publicly provided goods and services be estimated and compared with the level of revenues actually generated. Such an analysis is beyond the scope of this paper. In addition, it is also conceivable that the causality between comprehensive tax bases and the level of revenues generated by the states could be reversed from the direction considered in this paper. That is, it may be rational behavior on the part of states with greater levels of spending for whatever reason, to finance these expenditures with a broader tax base. Perhaps the significance of the Leviathan theory, and the results of this research which support aspects of that theory, are best viewed as part of the ongoing research in the development of a positive theory of public sector tax structure. The Leviathan theory contributes a new and important dimension to our understanding of government behavior. Other recent researchers in the area of tax structure theory, by focusing on the demand side, have formulated their theory solely in terms of voting rules and arrangements. See, for example, Sjoquist (1980) and Hettich and Winer (1984). Integration of the Leviathan theory with the more traditional public-choice theory remains an area for future research. Copyright Martinus Nijhoff Publishers 1986

Suggested Citation

  • Michael Nelson, 1986. "An empirical analysis of state and local tax structure in the context of the Leviathan model of government," Public Choice, Springer, vol. 49(3), pages 283-294, January.
    • Handle: RePEc:kap:pubcho:v:49:y:1986:i:3:p:283-294
    DOI: 10.1007/BF00127344
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/BF00127344
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/BF00127344?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Brennan,Geoffrey & Buchanan,James M., 2006. "The Power to Tax," Cambridge Books, Cambridge University Press, number 9780521027922.
    2. Hettich, Walter & Winer, Stanley, 1984. "A positive model of tax structure," Journal of Public Economics, Elsevier, vol. 24(1), pages 67-87, June.
    3. David Sjoquist, 1981. "A median voter analysis of variations in the use of property taxes among local governments," Public Choice, Springer, vol. 36(2), pages 273-285, January.
    4. Buchanan, James M, 1985. "The Moral Dimension of Debt Financing," Economic Inquiry, Western Economic Association International, vol. 23(1), pages 1-6, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Aaron Schneider, 2006. "Responding to fiscal stress: Fiscal institutions and fiscal adjustment in four Brazilian states," Journal of Development Studies, Taylor & Francis Journals, vol. 42(3), pages 402-425.
    2. Alberto Sole Olle, 1998. "The effects of tax deductibility on the mix of property taxes and use charges: an empirical analysis of the spanish case," Working Papers in Economics 41, Universitat de Barcelona. Espai de Recerca en Economia.
    3. Walter Misiolek & Harold Elder, 1988. "Tax structure and the size of government: An empirical analysis of the fiscal illusion and fiscal stress arguments," Public Choice, Springer, vol. 57(3), pages 233-245, June.
    4. Cecil Bohanon & James McClure, 1986. "Taxes, welfare costs, and public consumption: The case of the unwitting monopsonist," Public Choice, Springer, vol. 49(3), pages 235-247, January.
    5. Roger D. Congleton, 1988. "An Overview of the Contractarian Public Finance of James Buchanan," Public Finance Review, , vol. 16(2), pages 131-157, April.
    6. Zareh Asatryan & Lars Feld & Benny Geys, 2015. "Partial fiscal decentralization and sub-national government fiscal discipline: empirical evidence from OECD countries," Public Choice, Springer, vol. 163(3), pages 307-320, June.
    7. Carlsen, Fredrik & Langset, Bjorg & Rattso, Jorn, 2005. "The relationship between firm mobility and tax level: Empirical evidence of fiscal competition between local governments," Journal of Urban Economics, Elsevier, vol. 58(2), pages 273-288, September.
    8. Kenneth Greene, 1986. "The public choice of differing degrees of tax progressivity," Public Choice, Springer, vol. 49(3), pages 265-282, January.
    9. Paolo Liberati, 2011. "‘‘Which Tax’’ or ‘‘Which Tax for What?’’: Tax Assignment in the Theory of Fiscal Federalism," Public Finance Review, , vol. 39(3), pages 365-392, May.
    10. Gebhard Kirchgassner, 2002. "The effects of fiscal institutions on public finance: a survey of the empirical evidence," Chapters, in: Stanley L. Winer & Hirofumi Shibata (ed.), Political Economy and Public Finance, chapter 9, Edward Elgar Publishing.
    11. Joshua C. Hall & Justin M. Ross, 2010. "Tiebout Competition, Yardstick Competition, and Tax Instrument Choice: Evidence from Ohio School Districts," Public Finance Review, , vol. 38(6), pages 710-737, November.
    12. Facchini, Francois, 2014. "The determinants of public spending: a survey in a methodological perspective," MPRA Paper 53006, University Library of Munich, Germany.
    13. repec:ebl:ecbull:v:8:y:2006:i:12:p:1-8 is not listed on IDEAS
    14. Daniel Sutter & Lee Coppock, 2003. "The Tax Man Cometh: Constitutional Principles for Tax Enforcement," Constitutional Political Economy, Springer, vol. 14(2), pages 107-118, June.
    15. Lawrence Kenny & Stanley Winer, 2006. "Tax Systems in the World: An Empirical Investigation into the Importance of Tax Bases, Administration Costs, Scale and Political Regime," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 13(2), pages 181-215, May.
    16. Grottke Markus & Kittl Maximilian, 2013. "Komplexität im Steuerrecht – Zentrale politökonomische Theorien im Lichte einer empirischen Ursachenforschung mit Hilfe von Process Tracing / Tax complexity in emergence – pivotal political-economic t," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 64(1), pages 163-194, January.
    17. Ashworth, John & Heyndels, Bruno, 1997. "Politicians' preferences on local tax rates: An empirical analysis," European Journal of Political Economy, Elsevier, vol. 13(3), pages 479-502, September.
    18. Gill, H. Leroy & Haurin, Donald R., 2001. "The choice of tax base by local authorities: voter preferences, special interest groups, and tax base diversification," Regional Science and Urban Economics, Elsevier, vol. 31(6), pages 733-749, November.
    19. Guy Gilbert, 1996. "Le fédéralisme financier, perspectives de microéconomie spatiale," Revue Économique, Programme National Persée, vol. 47(2), pages 311-363.
    20. Lars P. Feld & Christoph A. Schaltegger, 2012. "Die Politische Ökonomik der Besteuerung," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 13(1-2), pages 116-136, February.
    21. Stuart Landon, 1998. "Institutional Structure and Education Spending," Public Finance Review, , vol. 26(5), pages 411-446, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:pubcho:v:49:y:1986:i:3:p:283-294. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.