THE DYNAMICS OF THE EFFECTS OF REVENUE SHARING ON TAX-EFFORTS OF STATE AND LOCAL GOVERNMENTS.
Item
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Title
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THE DYNAMICS OF THE EFFECTS OF REVENUE SHARING ON TAX-EFFORTS OF STATE AND LOCAL GOVERNMENTS.
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Identifier
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AAI8312366
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identifier
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8312366
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Creator
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RAHMAN, YOUSUF HABIBUR.
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Contributor
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Herbert Geyer | Michael Grossman
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Date
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1983
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Language
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English
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Publisher
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City University of New York.
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Subject
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Economics, Finance
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Abstract
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Program and tax-effort analysis of categorical matching grants and unconditional grants has until now mostly relied on partial equilibrium models. Partial equilibrium analysis proves that an unconditional grant unambiguously brings about significant relief in fiscal stress of the grant receiving jurisdiction, which is one of the fundamental objectives why such grants are appropriated.;The point of departure of this study is aimed at unfolding the structure of the U.S. revenue sharing grant system to show why partial equilibrium models may give totally misleading theoretical conclusions. The factors specially emphasised are the possibility of a federal tax surcharge to finance revenue sharing, intra-regional interactions of macro economic activities and inter-regional population migration due to income and tax burden differential between states. It is the contention of this study that to explore pragmatically the tax-effort effect of a revenue sharing grant, all these factors ought to be considered.;An aggregative income-flow model is constructed where these factors have been incorporated. A tax-effort coefficient is derived. Theoretical conditions are isolated and identified under which the tax-effort coefficient with revenue sharing is greater compared to a no revenue sharing situation. If conditions are satisfied it is concluded that such regions get a definite incentive to increase local taxes, contrary to the very objective of these grants. Obviously, factors that were not adequately considered under partial equilibrium setting turn out to play significant roles to render results of the static analysis less significant.;The underlying theoretical conditions have also been empirically explored for forty-eight of the states in the U.S., and the results show that very few of these states probably end up getting fiscal relief relative to each other. Moreover, contrary to most predictions, states that seem to get relative fiscal relief, are not necessarily the ones that exert a high fiscal stress before the grant was executed. It is concluded therefore that the fiscal stress relieving potentiality of revenue sharing grants in the U.S., may have been over-estimated and/or it's incidence imprecisely determined.
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Type
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dissertation
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Source
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PQT Legacy CUNY.xlsx
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degree
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Ph.D.
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Program
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Economics
