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A reexamination of state fiscal health and amnesty enactment

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  • Hari Luitel
  • Mehmet Tosun

Abstract

We use event history analysis to separately model a state’s first and then repeated tax amnesties and test the revenue yield versus the fiscal stress hypotheses using a panel of annual data from all 50 states for the period 1982–2010. We also split our sample into two sub-periods, 1982–1988 and 1989–2010, to more easily compare our results to other studies and to see if there is a significant difference between early tax amnesties and more recent ones. We find that state fiscal stress is more important than the potential yield from an amnesty, particularly for more recent amnesties. Our findings contrast with the existing literature which found evidence that states are likely to enact tax amnesties due to a revenue yield motive rather than a fiscal stress motive. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Hari Luitel & Mehmet Tosun, 2014. "A reexamination of state fiscal health and amnesty enactment," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(5), pages 874-893, October.
    • Handle: RePEc:kap:itaxpf:v:21:y:2014:i:5:p:874-893
    DOI: 10.1007/s10797-013-9278-8
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    References listed on IDEAS

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    20. Benno Torgler & Christoph A. Schaltegger & Markus Schaffner, 2003. "Is Forgiveness Divine? A Cross-Culture Comparison of Tax Amnesties," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 139(III), pages 375-396, September.
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    Cited by:

    1. Muhammad Alishahdani Ibrahim & Rita Myrna & Ira Irawati & J. B. Kristiadi, 2017. "A Systematic Literature Review on Tax Amnesty in 9 Asian Countries," International Journal of Economics and Financial Issues, Econjournals, vol. 7(3), pages 220-225.
    2. Bayer, Ralph-C. & Oberhofer, Harald & Winner, Hannes, 2015. "The occurrence of tax amnesties: Theory and evidence," Journal of Public Economics, Elsevier, vol. 125(C), pages 70-82.
    3. Garz, Marcel & Pagels, Verena, 2018. "Cautionary tales: Celebrities, the news media, and participation in tax amnesties," Journal of Economic Behavior & Organization, Elsevier, vol. 155(C), pages 288-300.
    4. Osman Cenk Kanca & Metin Bayrak, 2024. "An Econometric Research on the Economic Effects of Tax Amnesties," International Journal of Economics and Financial Issues, Econjournals, vol. 14(4), pages 206-213, July.
    5. Fany Inasius & Giri Darijanto & Engelwati Gani & Gatot Soepriyanto, 2020. "Tax Compliance After the Implementation of Tax Amnesty in Indonesia," SAGE Open, , vol. 10(4), pages 21582440209, October.
    6. Huynh, Dat & Sokolova, Anna & Tosun, Mehmet S., 2022. "Tax Elasticity of Border Sales: A Meta-Analysis," IZA Discussion Papers 15525, Institute of Labor Economics (IZA).
    7. Azeem Mujahid & Danish Ahmed Siddiqui, 2019. "The Effect of Tax Amnesties Programs on Tax Collection and Economic Performance: A Global Macro Economic Analysis," International Journal of Social and Administrative Sciences, Asian Economic and Social Society, vol. 4(2), pages 108-128, June.
    8. Bayer, Ralph-C. & Oberhofer, Harald & Winner, Hannes, 2015. "The occurrence of tax amnesties: Theory and evidence," Journal of Public Economics, Elsevier, vol. 125(C), pages 70-82.

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    More about this item

    Keywords

    Tax amnesty; Fiscal stress; Duration analysis; H20; H71; H80; C41;
    All these keywords.

    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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