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Exploring the Tax Revolt: an Analysis of the Effects of State Tax and Expenditure Limitation Laws

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  • Harold W. Elder

    (University of Alabama)

Abstract

This article explores what has come to be known as the Tax Revolt, which reached Abstract its zenith during the late 1970s with the widespread enactment of fiscal constraints at the state and local level in the United States. The focus here is on expenditure and revenue limitation laws and their effects on the growth of state government. To consider whether these laws have been effective in constraining the growth of government, an empirical analysis is conducted for the states that have enacted such laws. Data is analyzed from these states over a thirty-five year period, and considers the effects on tax growth due to the presence of a limitation measure. The results show quite strongly that revenue and expenditure limitation laws can be effective tools to contain tax burdens. The results also indicate that the form of the constraint is important and that the effect of limitation rules may also be tied to other constraint mechanisms.

Suggested Citation

  • Harold W. Elder, 1992. "Exploring the Tax Revolt: an Analysis of the Effects of State Tax and Expenditure Limitation Laws," Public Finance Review, , vol. 20(1), pages 47-63, January.
    • Handle: RePEc:sae:pubfin:v:20:y:1992:i:1:p:47-63
    DOI: 10.1177/109114219202000103
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    Cited by:

    1. Knight, Brian G., 2000. "Supermajority voting requirements for tax increases: evidence from the states," Journal of Public Economics, Elsevier, vol. 76(1), pages 41-67, April.
    2. Douglas C. Bice & William H. Hoyt, 1997. "The Impact of Mandates and Tax Limits on Voluntary Contributions to Local Public Services: An Application to Fire Protection Services," Public Economics 9704002, University Library of Munich, Germany.
    3. Thomas A. Garrett & Gary A. Wagner, 2004. "State government finances: World War II to the current crises," Review, Federal Reserve Bank of St. Louis, vol. 86(Mar), pages 9-25.
    4. Poterba, James M., 1995. "Balanced Budget Rules and Fiscal Policy: Evidence From the States," National Tax Journal, National Tax Association;National Tax Journal, vol. 48(3), pages 329-336, September.
    5. repec:ces:ifodic:v:12:y:2014:i:1:p:19108838 is not listed on IDEAS
    6. Wagner, Gary A., 2003. "Are state budget stabilization funds only the illusion of savings?: Evidence from stationary panel data," The Quarterly Review of Economics and Finance, Elsevier, vol. 43(2), pages 213-238.
    7. Heinemann, Friedrich & Moessinger, Marc-Daniel & Yeter, Mustafa, 2018. "Do fiscal rules constrain fiscal policy? A meta-regression-analysis," European Journal of Political Economy, Elsevier, vol. 51(C), pages 69-92.
    8. Ronald J. Shadbegian, 1996. "Do Tax And Expenditure Limitations Affect The Size And Growth Of State Government?," Contemporary Economic Policy, Western Economic Association International, vol. 14(1), pages 22-35, January.
    9. Tucker Staley, 2015. "The Effect of TELs on State Revenue Volatility: Evidence From the American States," Public Budgeting & Finance, Wiley Blackwell, vol. 35(1), pages 29-48, March.
    10. Heiko T. Burret & Lars P. Feld, 2014. "A Note on Budget Rules and Fiscal Federalism," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 12(01), pages 03-11, April.
    11. Poterba, James M., 1995. "Balanced Budget Rules and Fiscal Policy: Evidence From the States," National Tax Journal, National Tax Association, vol. 48(3), pages 329-36, September.
    12. Poterba, James M, 1994. "State Responses to Fiscal Crises: The Effects of Budgetary Institutions and Politics," Journal of Political Economy, University of Chicago Press, vol. 102(4), pages 799-821, August.
    13. Edward C. Waters & David W. Holland & Bruce A. Weber, 1997. "Economic Impacts of a Property Tax Limitation: A Computable General Equilibrium Analysis of Oregon's Measure 5," Land Economics, University of Wisconsin Press, vol. 73(1), pages 72-89.
    14. Gebhard Kirchgassner, 2002. "The effects of fiscal institutions on public finance: a survey of the empirical evidence," Chapters, in: Stanley L. Winer & Hirofumi Shibata (ed.), Political Economy and Public Finance, chapter 9, Edward Elgar Publishing.
    15. Heiko T. Burret & Lars P. Feld, 2014. "A Note on Budget Rules and Fiscal Federalism," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 12(1), pages 03-11, 04.
    16. Figlio, David N., 1997. "Did the "tax revolt" reduce school performance?," Journal of Public Economics, Elsevier, vol. 65(3), pages 245-269, September.
    17. Figlio, David N., 1998. "Short-Term Effects of a 1990s-Era Property Tax Limit: Panel Evidence on Oregon's Measure 5," National Tax Journal, National Tax Association, vol. 51(n. 1), pages 55-70, March.
    18. Ellen C. Seljan, 2015. "Ready to Bargain: The Effect of Fiscal Stress on Supermajority Requirements to Raise Taxes," Public Budgeting & Finance, Wiley Blackwell, vol. 35(3), pages 24-43, September.
    19. Figlio, David N., 1998. "Short-Term Effects of a 1990s-Era Property Tax Limit: Panel Evidence on Oregon's Measure 5," National Tax Journal, National Tax Association;National Tax Journal, vol. 51(1), pages 55-70, March.

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