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Rational Reactions to Temporary Sales Tax Legislation

Author

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  • Thomas M Fullerton Jr

    (University of Texas at El Paso)

Abstract

Budgetary difficulties in 1985 led the Idaho Legislature to adopt special fiscal measures. They included Agency appropriation cuts and a 14-month one-cent increase in the state sales tax. Similar steps had previously been taken in 1983. Data including the 1983 temporary tax hike period are analyzed to gauge the effectiveness and potential effects of the 1985 legislation. Structural econometric, univariate ARIMA, and cross section statistical tests indicate that Idaho consumers delay purchases in anticipation of sales tax rate reductions.

Suggested Citation

  • Thomas M Fullerton Jr, 2004. "Rational Reactions to Temporary Sales Tax Legislation," Public Economics 0408004, EconWPA.
  • Handle: RePEc:wpa:wuwppe:0408004
    Note: Type of Document - doc; pages: 8
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    Citations

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    Cited by:

    1. Thomas M. Fullerton JR., 2001. "Specification of a Borderplex Econometric Forecasting Model," International Regional Science Review, , vol. 24(2), pages 245-260, April.
    2. Thomas M Fullerton Jr, 2004. "Cross Border Business Cycle (Impacts on Commercial Electricity Demand," Urban/Regional 0407010, EconWPA.
    3. Thomas M Fullerton Jr, 2004. "A Composite Approach to Forecasting State Government Revenues," Public Economics 0408006, EconWPA.
    4. Thomas M Fullerton Jr & David A Schauer, 2004. "Regional Econometric Assessment of Aggregate Water Consumption Trends," Urban/Regional 0407006, EconWPA.

    More about this item

    Keywords

    Idaho; Sales Tax Legislation; Consumer Reactions;

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue

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