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Individual Tax Rates and Regional Tax Revenues: A Cross-State Analysis

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  • Hakan Yilmazkuday

    (Department of Economics, Florida International University)

Abstract

This paper analyzes the effects of state-level personal tax rates on state tax revenue and individual welfare. The policy analysis based on a general equilibrium model suggests that tax revenues would benefit from higher wage-income, sales or property taxes, while any increase in dividend-income tax would result in a reduction of revenues. It is also shown that individuals would suffer from an increase in state-level wage-income tax, dividend-tax or sales tax, while they would benefit from an increase in property taxes. The heterogeneity across states is determined by a TaxIndex, a weighted average of initial taxes at the state level.

Suggested Citation

  • Hakan Yilmazkuday, 2015. "Individual Tax Rates and Regional Tax Revenues: A Cross-State Analysis," Working Papers 1507, Florida International University, Department of Economics.
  • Handle: RePEc:fiu:wpaper:1507
    as

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    File URL: http://economics.fiu.edu/research/working-papers/2015/1507/1507.pdf
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    References listed on IDEAS

    as
    1. Judd, Kenneth L., 1985. "Redistributive taxation in a simple perfect foresight model," Journal of Public Economics, Elsevier, vol. 28(1), pages 59-83, October.
    2. Mark Partridge & Dan Rickman, 2010. "Computable General Equilibrium (CGE) Modelling for Regional Economic Development Analysis," Regional Studies, Taylor & Francis Journals, vol. 44(10), pages 1311-1328.
    3. McKitrick, Ross R., 1998. "The econometric critique of computable general equilibrium modeling: the role of functional forms," Economic Modelling, Elsevier, vol. 15(4), pages 543-573, October.
    4. Klaus Conrad & Stefan Heng, 2002. "Financing road infrastructure by savings in congestion costs: A CGE analysis," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 36(1), pages 107-122.
    5. Douglas R. Dalenberg & Mark D. Partridge, 1997. "Public Infrastructure and Wages: Public Capital's Role as a Productive Input and Household Amenity," Land Economics, University of Wisconsin Press, vol. 73(2), pages 268-284.
    6. Partridge, Mark D. & Rickman, Dan S., 1999. "Which comes first, jobs or people? An analysis of the recent stylized facts," Economics Letters, Elsevier, vol. 64(1), pages 117-123, July.
    7. Roos, Michael W. M., 2004. "Agglomeration and the public sector," Regional Science and Urban Economics, Elsevier, vol. 34(4), pages 411-427, July.
    8. Mark D. Partridge & Dan S. Rickman, 1998. "Regional Computable General Equilibrium Modeling: A Survey and Critical Appraisal," International Regional Science Review, , vol. 21(3), pages 205-248, December.
    9. Douglas R. Dalenberg & Mark D. Partridge & Dan S. Rickman, 1998. "Public Infrastructure: Pork or Jobs Creator?," Public Finance Review, , vol. 26(1), pages 24-52, January.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Individual Tax Rates and Regional Tax Revenues: A Cross-State Analysis
      by Hakan Yilmazkuday in Hakan Yilmazkuday's Blog on 2016-06-13 21:08:00

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    Cited by:

    1. Ayoki, Milton, 2017. "Estimating the Revenue Impacts of Tax Harmonisation," MPRA Paper 83548, University Library of Munich, Germany.

    More about this item

    Keywords

    Regional Taxes; State Tax Revenue; Individual Welfare;

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies

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