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Tax Revenue and Tax Structure

Author

Listed:
  • Charles H. Breeden

    (Marquette University)

  • William J. Hunter

    (Marquette University)

Abstract

This article examines the relationship between the selection of tax instruments Abstract and the size of the public budget. It develops and tests with data from 37 large cities a model that is an alternative to the commonly cited fiscal illusion model. The model is predicated upon the assumption that budget-maximizing governments prefer broad-based tax systems composed of inelastic taxes and not just many taxes. The empirical tests indicate that cities that rely on taxes with elastic bases tend toward lower per capita tax revenues and cities that rely on taxes with inelastic bases tend toward higher per capita tax revenues.

Suggested Citation

  • Charles H. Breeden & William J. Hunter, 1985. "Tax Revenue and Tax Structure," Public Finance Review, , vol. 13(2), pages 216-224, April.
    • Handle: RePEc:sae:pubfin:v:13:y:1985:i:2:p:216-224
    DOI: 10.1177/109114218501300206
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    References listed on IDEAS

    as
    1. Richard Wagner, 1976. "Revenue structure, fiscal illusion, and budgetary choice," Public Choice, Springer, vol. 25(1), pages 45-61, March.
    2. Eleanor Craig & A. Heins, 1980. "The effect of tax elasticity on government spending," Public Choice, Springer, vol. 35(3), pages 267-275, January.
    3. Werner W. Pommerehne & Friedrich Schneider*, 1978. "Fiscal Illusion, Political Institutions, And Local Public Spending," Kyklos, Wiley Blackwell, vol. 31(3), pages 381-408, August.
    4. Richard Carter, 1982. "Beliefs and errors in voting choices: A restatement of the theory of fiscal illusion," Public Choice, Springer, vol. 39(3), pages 343-360, January.
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    Cited by:

    1. F. Forte, 1997. "The measurement of 'fiscal burden' on GDP instead than on national net value added produced: a chapter in fiscal illusion," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 50(202), pages 337-375.
    2. Facchini, Francois, 2014. "The determinants of public spending: a survey in a methodological perspective," MPRA Paper 53006, University Library of Munich, Germany.
    3. Walter Misiolek & Harold Elder, 1988. "Tax structure and the size of government: An empirical analysis of the fiscal illusion and fiscal stress arguments," Public Choice, Springer, vol. 57(3), pages 233-245, June.
    4. Feenberg, Daniel R. & Rosen, Harvey S., 1987. "Tax structure and public sector growth," Journal of Public Economics, Elsevier, vol. 32(2), pages 185-201, March.
    5. Musharraf Cyan & Jorge Martinez-Vazquez & VIoleta Vulovic, 2013. "Measuring tax effort: Does the estimation approach matter and should effort be linked to expenditure goals?," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1308, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    6. Roberto Dell'Anno & Morena De Stefano, 2014. "Un indicatore sintetico dell?Illusione Finanziaria. Un tentativo di stima per l?Italia," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2014(1), pages 65-92.
    7. Michael Marlow & David Joulfaian, 1989. "The determinants of off-budget activity of state and local governments," Public Choice, Springer, vol. 63(2), pages 113-123, November.
    8. Taeseop Yoon & Junseop Shim, 2016. "An empirical analysis of the fiscal impacts of changes in tax revenue multiplicity: Focusing on Florida county case," International Review of Public Administration, Taylor & Francis Journals, vol. 21(1), pages 21-36, January.
    9. Haug, Peter, 2009. "Shadow Budgets, Fiscal Illusion and Municipal Spending: The Case of Germany," IWH Discussion Papers 9/2009, Halle Institute for Economic Research (IWH).

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