An Examination of the Relation between State Fiscal Health and Amnesty Enactment
Assuming 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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- Fisher, Ronald C. & Goddeeris, John H. & Young, James C., 1989. "Participation in Tax Amnesties: The Individual Income Tax," National Tax Journal, National Tax Association, vol. 42(1), pages 15-27, March.
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"Temporal Aggregation and Economic Time Series,"
Journal of Business & Economic Statistics,
American Statistical Association, vol. 13(4), pages 441-51, October.
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