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Local Taxes and Personal Income: an Impact Analysis

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  • Jacob De Rooy

Abstract

A four-equation regional econometric model was developed to explain the effects of local government taxes and expenditures on personal income. The model was used to derive "balanced-budget" tax multipliers for each of 64 counties in Pennsylvania. The analysis shows that a 20% taxcut would result in net losses in personal income in 48 of these counties. The relative gain or loss in income is related to regional characteristics such as income, income distribu tion, revenue sources, and growth rates. The results do not provide much encouragement for proponents of "supply-side" economic policies.

Suggested Citation

  • Jacob De Rooy, 1982. "Local Taxes and Personal Income: an Impact Analysis," Public Finance Review, , vol. 10(4), pages 457-478, October.
    • Handle: RePEc:sae:pubfin:v:10:y:1982:i:4:p:457-478
    DOI: 10.1177/109114218201000403
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    References listed on IDEAS

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