IDEAS home Printed from https://ideas.repec.org/p/ecl/wisagr/447.html
   My bibliography  Save this paper

Local Government Taxing, Spending and Economic Growth: New Evidence for Wisconsin

Author

Listed:
  • Deller, Steven C.

    (U of Wisconsin)

  • Lledo, Victor

Abstract

Wisconsin is generally viewed as a high tax state. Depending on how one measures tax burdens, Wisconsin's rankings range from either the top five, or right in the middle of the national average. While these rankings have always been a source of discussion in Wisconsin, the state's current budget deficit, and the proposed solutions, has renewed the public debate about Wisconsin's fiscal policies with a vengeance. Accusations of duplication of services, higher costs inherent to the small scale of operation and a general tendency to be "big spenders" have created a firestorm of controversy. Further, a range of business support organizations has renewed yet again the call for tax reductions in the name of economic growth. In this applied research study we again ask the fundamental question "are Wisconsin local taxes too high" but we address the research question from a slightly different direction. Rather than looking at local property values and corresponding tax generating abilities, we measure the influence of local spending and taxation decisions on local economic growth. If local spending and taxation levels are indeed too high, we should see a dampening affect on local economic growth rates.

Suggested Citation

  • Deller, Steven C. & Lledo, Victor, 2002. "Local Government Taxing, Spending and Economic Growth: New Evidence for Wisconsin," Staff Paper Series 447, University of Wisconsin, Agricultural and Applied Economics.
    • Handle: RePEc:ecl:wisagr:447
    as

    Download full text from publisher

    File URL: http://www.aae.wisc.edu/pubs/sps/pdf/stpap447.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Shields, Martin & Deller, Steven C. & Stallmann, Judith I., 2001. "Comparing the Impacts of Retiree versus Working-Age Families on a Small Rural Region: An Application of the Wisconsin Economic Impact Modeling System," Agricultural and Resource Economics Review, Cambridge University Press, vol. 30(1), pages 20-31, April.
    2. Timothy J. Bartik, 2003. "Local Economic Development Policies," Upjohn Working Papers 03-91, W.E. Upjohn Institute for Employment Research.
    3. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    4. William A. Brock & Steven N.Durlauf, 2000. "Growth Economics and Reality," NBER Working Papers 8041, National Bureau of Economic Research, Inc.
    5. Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(2), pages 465-490.
    6. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 103-126, October.
    7. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
    8. Timothy J. Bartik, 1992. "The Effects of State and Local Taxes on Economic Development: A Review of Recent Research," Economic Development Quarterly, , vol. 6(1), pages 102-111, February.
    9. Devarajan, Shantayanan & Swaroop, Vinaya & Heng-fu, Zou, 1996. "The composition of public expenditure and economic growth," Journal of Monetary Economics, Elsevier, vol. 37(2-3), pages 313-344, April.
    10. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, vol. 82(4), pages 942-963, September.
    11. Robert J. Barro & Xavier Sala-I-Martin, 1992. "Public Finance in Models of Economic Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(4), pages 645-661.
    12. Kneller, Richard & Bleaney, Michael F. & Gemmell, Norman, 1999. "Fiscal policy and growth: evidence from OECD countries," Journal of Public Economics, Elsevier, vol. 74(2), pages 171-190, November.
    13. Mofidi, Alaeddin & Stone, Joe A, 1990. "Do State and Local Taxes Affect Economic Growth?," The Review of Economics and Statistics, MIT Press, vol. 72(4), pages 686-691, November.
    14. repec:bla:ecorec:v:78:y:2002:i:243:p:375-80 is not listed on IDEAS
    15. Newman, Robert J. & Sullivan, Dennis H., 1988. "Econometric analysis of business tax impacts on industrial location: What do we know, and how do we know it?," Journal of Urban Economics, Elsevier, vol. 23(2), pages 215-234, March.
    16. Zou, Heng-fu, 1996. "Taxes, Federal Grants, Local Public Spending, and Growth," Journal of Urban Economics, Elsevier, vol. 39(3), pages 303-317, May.
    17. Shields, Martin & Deller, Steven C., 1998. "Commuting's Effect on Local Retail Market Performance," The Review of Regional Studies, Southern Regional Science Association, vol. 28(2), pages 71-90, Fall.
    18. Mendoza, Enrique G. & Milesi-Ferretti, Gian Maria & Asea, Patrick, 1997. "On the ineffectiveness of tax policy in altering long-run growth: Harberger's superneutrality conjecture," Journal of Public Economics, Elsevier, vol. 66(1), pages 99-126, October.
    19. Helen F. Ladd, 1998. "local government tax and land use policies in the united states," Books, Edward Elgar Publishing, number 1332.
    20. Timothy J. Bartik, 2004. "Economic Development," Book chapters authored by Upjohn Institute researchers, in: J. Richard Aronson & Eli Schwartz (ed.),Managememnt Policies in Local Government Finance, pages 355-390, W.E. Upjohn Institute for Employment Research.
    21. Chamley, Christophe, 1986. "Optimal Taxation of Capital Income in General Equilibrium with Infinite Lives," Econometrica, Econometric Society, vol. 54(3), pages 607-622, May.
    22. Martin Shields & Judith I. Stallmann & Steven C. Deller, 1999. "Simulating the Economic and Fiscal Impacts of High- and Low-Income Elderly on a Small Rural Region," The Review of Regional Studies, Southern Regional Science Association, vol. 29(2), pages 175-196, Fall.
    23. Michael J. Wasylenko, 1980. "Evidence of Fiscal Differentials and Intrametropolitan Firm Relocation," Land Economics, University of Wisconsin Press, vol. 56(3), pages 339-349.
    24. Kristin J. Forbes, 2000. "A Reassessment of the Relationship between Inequality and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 869-887, September.
    25. Judd, Kenneth L, 1985. "On the Performance of Patents," Econometrica, Econometric Society, vol. 53(3), pages 567-585, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kneller, Richard & Bleaney, Michael F. & Gemmell, Norman, 1999. "Fiscal policy and growth: evidence from OECD countries," Journal of Public Economics, Elsevier, vol. 74(2), pages 171-190, November.
    2. Hammed Adetola Adefeso, 2016. "Productive Government Expenditure and Economic Performance in sub-Saharan Africa: An Empirical Investigation," Zagreb International Review of Economics and Business, Faculty of Economics and Business, University of Zagreb, vol. 19(2), pages 1-18, November.
    3. Hyun Park, 2010. "Fiscal Policy and Equitable Growth," Review of Development Economics, Wiley Blackwell, vol. 14(1), pages 121-140, February.
    4. Norman Gemmell, 2001. "Fiscal Policy in a Growth Framework," WIDER Working Paper Series DP2001-84, World Institute for Development Economic Research (UNU-WIDER).
    5. Åsa Johansson, 2016. "Public Finance, Economic Growth and Inequality: A Survey of the Evidence," OECD Economics Department Working Papers 1346, OECD Publishing.
    6. Mr. Hyun Park, 2006. "Expenditure Composition and Distortionary Tax for Equitable Economic Growth," IMF Working Papers 2006/165, International Monetary Fund.
    7. Amal MATALLAH & Amal MATALLAH, 2017. "Does fiscal policy spur economic growth? Empirical evidence from Algeria," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(3(612), A), pages 125-146, Autumn.
    8. Carlos Mulas-Granados, 2003. "The Trade-Off between Growth & Equality and the Economic Impact of Alternative Fiscal Adjustment Strategies in the EU," European Economy Group Working Papers 20, European Economy Group.
    9. Mr. Benedict J. Clements & Mr. Sanjeev Gupta & Mr. Emanuele Baldacci & Mr. Carlos Mulas-Granados, 2002. "Expenditure Composition, Fiscal Adjustment, and Growth in Low-Income Countries," IMF Working Papers 2002/077, International Monetary Fund.
    10. Amit Nandan & Hrushikesh Mallick, 2022. "Do growth-promoting factors induce income inequality in a transitioning large developing economy? An empirical evidence from Indian states," Economic Change and Restructuring, Springer, vol. 55(2), pages 1109-1139, May.
    11. Sefa Awaworyi Churchill & Mehmet Ugur & Siew Ling Yew, 2017. "Does Government Size Affect Per-Capita Income Growth? A Hierarchical Meta-Regression Analysis," The Economic Record, The Economic Society of Australia, vol. 93(300), pages 142-171, March.
    12. Pula Lekë & Elshani Alban, 2018. "Role of Public Expenditure in Economic Growth: Econometric Evidence from Kosovo 2002–2015," Baltic Journal of Real Estate Economics and Construction Management, Sciendo, vol. 6(1), pages 74-87, June.
    13. Dimitrios Paparas & Christian Richter, 2015. "Fiscal policy and economic growth: Empirical evidence from the European Union," Working Papers 2015.06, International Network for Economic Research - INFER.
    14. Muinelo-Gallo, Leonel & Roca-Sagalés, Oriol, 2013. "Joint determinants of fiscal policy, income inequality and economic growth," Economic Modelling, Elsevier, vol. 30(C), pages 814-824.
    15. repec:rre:publsh:v:34:y:2004:i:1:p:72-94 is not listed on IDEAS
    16. Richard Kneller & Norman Gemmell, 2002. "Fiscal Policy, Growth and Convergence in Europe," European Economy Group Working Papers 14, European Economy Group.
    17. António Afonso & Juan Alegre, 2011. "Economic growth and budgetary components: a panel assessment for the EU," Empirical Economics, Springer, vol. 41(3), pages 703-723, December.
    18. Hajamini, Mehdi & Falahi, Mohammad Ali, 2018. "Economic growth and government size in developed European countries: A panel threshold approach," Economic Analysis and Policy, Elsevier, vol. 58(C), pages 1-13.
    19. Luo, Weijie, 2019. "Composition of taxes and growth: Evidence from OECD panel data," Economics Discussion Papers 2019-43, Kiel Institute for the World Economy (IfW Kiel).
    20. Minea, Alexandru, 2008. "The Role of Public Spending in the Growth Theory Evolution," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 5(2), pages 99-120, June.
    21. Bekzod ABDULLAEV & Laszlo KONYA, 2014. "Growth Maximizing Tax Rate for Uzbekistan," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 14(1), pages 59-72.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecl:wisagr:447. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/dauwius.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.