An Examination of the Relation between State Fiscal Health and Amnesty Enactment
AbstractAssuming a normal distribution of hazards, Dubin, Graetz, and Wilde (1992) analyze state tax amnesties in the 1980s and conclude that states run amnesties in response to revenue yield motive. Given the increased frequency with which states enacted amnesties during and after the 2001 recession, we investigate if there is a possible shift from revenue yield motive to fiscal stress motive. We find that the normal distribution of hazards assumption along with the multicollinearity problem led prior research to an erroneous conclusion, and that fiscal stress is indeed the main determinant of initial and repeated tax amnesties enacted by states between 1982 and 2005.
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Bibliographic InfoPaper provided by University of Nevada, Reno, Department of Economics & University of Nevada, Reno , Department of Resource Economics in its series Working Papers with number 10-009.
Length: 45 pages
Date of creation: Dec 2010
Date of revision:
Tax Amnesty; Fiscal Pressure; Duration Analysis;
Find related papers by JEL classification:
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
- H80 - Public Economics - - Miscellaneous Issues - - - General
- C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
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