State Tax Stability Criteria and the Revenue-Income Elasticity Coefficient Reconsidered

Wilford, Walton T.

doi:10.1086/ntj41792058

Cited by 30 publications

(5 citation statements)

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“…Last, but not least, in equation ( 1), GDP is used as an explanatory variable; for the sake of clarity, this choice has been made to avoid the use of GDP in the left side of the equation. 16 With regard to the second issuethe choice between tax bases and tax revenuesa general agreement has emerged on using tax bases to deal with the growth and variability of subnational tax instruments (e.g., Bruce et al, 2006;Groves & Kahn, 1952;Mikesell, 1977;Sobel & Holcombe, 1996;Wilford, 1965). This is especially due to the non-negligible advantage of eliminating the distortions linked to the measurement of effective tax rates and their changes when using tax revenues.…”

Section: Data and Variablesmentioning

confidence: 99%

The growth and variability of regional taxes: an application to Italy

2017

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The growth and variability of regional taxes: an application to Italy. Regional Studies. This paper investigates the potential\ud long-term growth and short-term cyclical stability of the Italian regional tax system. Short- and long-run elasticities with\ud respect to regional gross domestic product (GDP) are estimated between 2001 and 2012 for the surtax on central\ud personal income tax (RPIT) and for the regional tax on productive activities (RTPA). Cyclical reactions are more marked\ud for the RTPA and higher in the southern regions. Significant long-run growth of the RPIT and RTPA, on the other hand,\ud is found only in the northern regions. The results suggest that the behaviour of regional taxes may increase the Italian\ud north–south gap and cast some doubt on these taxes in financing essential public services, such as health, in each region

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Section: Data and Variablesmentioning

confidence: 99%

The growth and variability of regional taxes: an application to Italy

2017

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“…This empirical work extends empirical work based on Groves and Kahn (1952) paper on optimal tax portfolios. Early work focused on the short-run elasticity of different tax revenue streams with respect to personal income as a measure of variability (Wilford, 1965;Legler and Shapero, 1968;Mikesell, 1977). Later work considered growth in revenues or the long-run elasticity of different tax revenue streams with respect to personal income (Williams and Lamb, 1973;White, 1983;Fox and Campbell, 1984).…”

Section: Literature Reviewmentioning

confidence: 99%

Stress index of the Tax System of the Russian Federation in terms of Tax Revenues

Малкина¹,

Balakin²

2022

JTR

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Economic systems are increasingly exposed to external shocks of various nature, which test their resilience. The tax system, which is directly linked to the level of business activity, is one of the first to experience stress, so the ways it reacts to shock are of particular research interest. The 2020–2021 coronavirus pandemic made such studies more acute. The purpose of the paper is to develop and test new approaches in studying the resilience of the tax system in terms of tax revenues by analyzing the dynamics and structure of the tax system stress index in the Russian Federation in pre-pandemic, pandemic and recovery periods. The tax system stress index for tax revenues is calculated as the difference between the moving standard deviation and the moving average growth rate of tax revenues. We have developed a method for decomposing the stress index by source with determining the contribution of each tax to the average growth rate and to the standard deviation of the growth rate. We have also calculated the Russian Federation tax revenue stress index from December 2015 to March 2022 and identified its sources. It was found that the stress indices for almost all taxes (except for excises and state duties) are significantly positively correlated with each other. The main contribution to the growth of the stress index during the crisis and its decline within the recovery period is made by profit tax and a group of taxes on natural rent, which significantly negatively correlate with oil prices. Under the pandemic crisis in Russia, the stress index on revenue form special tax regimes also increased significantly. It was found that the personal income tax has a stabilizing effect on the tax system stress index in the crisis and post-crisis periods. During the pandemic in Russia, the damping role of excises also came to the fore, which is explained by institutional factors and changes in tax rates. The research findings can be advantageous for the authorities to make an impact on the most vulnerable components of the tax system of the Russian Federation in order to increase its resilience to crises.

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“…6. See, for example, Groves and Kahn (1952), Wilford (1965), Williams et al (1973), andFriedlaender, Swanson, andDue (1973).…”

Section: Notesmentioning

confidence: 99%

The Random Coefficient Approach for Estimating Tax Revenue Stability and Growth

Otsuka

Braun

1999

Public Finance Review

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The issue of tax revenue stability and growth has been of concern to policy makers and economists for many years. One important focus of the literature is the optimal tax portfolio, which assumes that revenue variance is entirely unpredictable. However, as evidenced by Fox and Campbell, some revenue variance arising from changes in economic conditions is predictable. The purpose of this study is to revisit Fox and Campbell's work. They studied revenue growth and stability with a fixed coefficient model (FCM). This study uses a random coefficient model (RCM). The RC Mapproach appears to provide improved estimates and confirms the conclusions of their earlier work. The response of short-run elasticities to the business cycle appears both strong and variable across commodities, and no single commodity dominates revenue growth or stability. Although this study supports the design of an optimal tax portfolio, it emphasizes the need to explicitly model for economic conditions and to continually adjust the tax portfolio. However, given the political and budgetary process, these adjustments may not be feasible.

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State Tax Stability Criteria and the Revenue-Income Elasticity Coefficient Reconsidered

Cited by 30 publications

References 0 publications

The growth and variability of regional taxes: an application to Italy

The growth and variability of regional taxes: an application to Italy

Stress index of the Tax System of the Russian Federation in terms of Tax Revenues

The Random Coefficient Approach for Estimating Tax Revenue Stability and Growth

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