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Short-run fiscal policy: welfare, redistribution, and aggregate effects in the short and long run
This paper quantifies the effects of two short-run fiscal policies, a temporary tax cut and a temporary rebate transfer, that are intended to stimulate economic activity. A reduction in income taxation provides immediate incentives to work and save more, raising aggregate output and consumption. A temporary rebate is mostly saved and increases consumption marginally. Both policies improve the overall welfare of households, and the rebate policy especially benefits low-income households. In the long run, however, the debt accumulated to finance the stimulus and a higher tax to service the debt ...
Journal Article
The effective use of property tax incentives for economic development
To make property-tax incentives for business more effective, do not approve every incentive request, target use of incentives, avoid incentive wars, cooperate with surrounding localities, and conduct regular evaluations.
Working Paper
A retrospective evaluation of the effects of temporary partial expensing
This paper examines how business investment responded to temporary partial expensing, first enacted in 2002 and expanded in 2003. In principle, partial expensing boosted the incentive to invest which should have had a discernable impact on spending. However, the tax changes did not occur in a vacuum, so it is challenging to isolate their impact. Our empirical approach exploits a feature of the tax change which, under certain assumptions, allows us to cleanly estimate its impact. Specifically, partial expensing provided relatively generous tax treatment for long-lived assets. We use this ...
Journal Article
Are state and local revenue systems becoming obsolete?
As recently as a year ago, state governments were awash in revenue, but reports from state revenue officials suggest that growth in tax receipts has slowed considerably in recent quarters. The flow of tax revenues into state coffers has decelerated primarily because the economy has suffered a severe shock (it was weakening even before September 11) and delayed tax cuts enacted in earlier, more prosperous times have taken full effect. However, many tax analysts believe that long-term economic, technological, and political trends are also partially responsible and will continue to constrain ...
Working Paper
Temporary partial expensing in a general-equilibrium model
This paper uses a dynamic general-equilibrium model with a nominal tax system to consider the effects of temporary partial expensing allowances on investment and other macroeconomic aggregates.
Journal Article
Spotlight: Texas wind energy: tax breaks, transmission lines key to growth
Texas became the nation's most prolific generator of wind power in the past decade, but the industry's future growth will depend on tax incentives to make it cost competitive and new transmission lines to get electricity to consumers.
Working Paper
Job creation tax credits and job growth: whether, when, and where?
This paper studies the effects of Job Creation Tax Credits (JCTCs) enacted by U.S. states over the past 20 years. First, we investigate whether JCTCs stimulate within-state job growth. Second, we assess from where any increased employment comes from ? in-state or out-of-state? Third, we evaluate when JCTCs' effects occur. In particular, we test for negative anticipation effects between JCTC enactment and when legislation goes into effect. We investigate these questions using a difference-in-differences estimator applied to monthly panel data on employment, the JCTC value, the JCTC effective ...
Journal Article
Roll the credits … and the tax incentives
Cities, states and even countries spar for film production business, but at what cost?