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A Model of the Distributional Incidence of State and Local Taxes

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  • Howard Chernick

    (Hunter College)

Abstract

This article estimates a model to explain differences across states in the distributional incidence of state and local tax systems. The model emphasizes the role of distributional conflict in modifying the tax structure incentives resulting from changes in relative prices. The model is tested using 1985 data on states. The major finding is that deductibility has a positive effect on the progressivity of state and local tax systems and that the effect is strong enough to imply a progressive impact of deductibility on the combined federal-state-local tax system. Tastes for redistri bution as measured by political liberalism and welfare benefit levels, rather than the strength of particular interest groups or the composition of expenditures, are the other major factors explaining differences in progressivity .

Suggested Citation

  • Howard Chernick, 1992. "A Model of the Distributional Incidence of State and Local Taxes," Public Finance Review, , vol. 20(4), pages 572-585, October.
    • Handle: RePEc:sae:pubfin:v:20:y:1992:i:4:p:572-585
    DOI: 10.1177/109114219202000412
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    References listed on IDEAS

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    Cited by:

    1. Howard Chernick, 1998. "Fiscal Effects of Block Grants for the Needy: An Interpretation of the Evidence," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 5(2), pages 205-233, May.
    2. Jason M. Fletcher & Matthew N. Murray, 2008. "What Factors Influence the Structure of the State Income Tax?," Public Finance Review, , vol. 36(4), pages 475-496, July.
    3. Suárez-Varela, Marta & Martínez-Espiñeira, Roberto & González-Gómez, Francisco, 2015. "An analysis of the price escalation of non-linear water tariffs for domestic uses in Spain," Utilities Policy, Elsevier, vol. 34(C), pages 82-93.
    4. Bahl, Roy & Martinez-Vazquez, Jorge & Wallace, Sally, 2002. "State and Local Government Choices in Fiscal Redistribution," National Tax Journal, National Tax Association;National Tax Journal, vol. 55(4), pages 723-742, December.
    5. Inman, Robert P. & Rubinfeld, Daniel L., 1996. "Designing tax policy in federalist economies: An overview," Journal of Public Economics, Elsevier, vol. 60(3), pages 307-334, June.
    6. John M. Foster, 2013. "Voter Ideology, Economic Factors, and State and Local Tax Progressivity," Public Finance Review, , vol. 41(2), pages 177-202, March.
    7. Howard Chernick, 1997. "Tax Progressivity and State Economic Performance," Economic Development Quarterly, , vol. 11(3), pages 249-267, August.
    8. Alberto Sole Olle, 1998. "The effects of tax deductibility on the mix of property taxes and use charges: an empirical analysis of the spanish case," Working Papers in Economics 41, Universitat de Barcelona. Espai de Recerca en Economia.

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