Working Paper: NBER ID: w1631
Authors: Daniel R. Feenberg; Harvey S. Rosen
Abstract: The two main workhorses of state tax systems are levies on sales and individual incomes. In this paper we develop and implement a coherent methodology for characterizing these systems. The measures thus generated are used to show how the various systems differ across states, and how they evolved over the seven year period 1977-1983. We consider the systems' revenue elasticities with respect to income, average and marginal tax rates at various income levels, and several other issues as well.
Keywords: State Taxes; Income Tax; Sales Tax; Tax Elasticity
JEL Codes: H24; H71
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Income changes (D31) | Revenue Elasticity (H30) |
| State tax structures (H71) | Business Location (R30) |
| State taxes (H79) | Migration Decisions (F22) |
| Demographic Characteristics (J11) | Tax Structure (H20) |
| Tax Structure (H20) | Demographic Characteristics (J11) |
| Competitive Tax Structures (H25) | State Tax Modifications (H29) |
| Inflation (E31) | Tax Burdens (H22) |
| Tax System Structure (H20) | Government Sector Size (H11) |
| Inflation (E31) | Tax Elasticity (H30) |
| Nominal Incomes (D31) | Tax Structure Variations (H20) |
| Tax Statutes (H20) | Tax Structure Variations (H20) |
| Income and Family Size (D19) | Sales Tax Liabilities (H25) |