Date of Award

6-2009

Document Type

Union College Only

Degree Name

Bachelor of Arts

Department

Economics

First Advisor

Muhammad Asali

Language

English

Keywords

tax, different, effects, revenue, taxes

Abstract

Each state within the United States has a different tax structure. One goal of the tax structures in place are to increase economic growth. Previous work such as Lee and Gordon (2005) and Gordon (1998) examine the effects of specific taxes on economic growth, concluding some taxes are more desirable than others. This study will build on this work, and examine the effects of every type of tax within a tax structure. In all, eight regressions are run on the effects that different tax structures have on growth of Gross Domestic Product per capita (GDPpCg). Taxes are measured as the proportion of revenue they generate in relation to the overall revenue that government receives. Results indicate that there are positive short term effects for different types of increased revenues, as well as different effects taking place years later. For instance, results show that an increase in the percent of revenue collected from the property tax leads to increased GDPpCg two years in the future. The last regression run shows the effect of changing a tax structure. This is done by observing the effect from the difference in revenues collected from different taxes from one year to the next. Results show that a positive transitory effect takes place from increasing the proportion of revenue raised from each tax except for the license tax. This is probably due to the increased barriers to entry that occur from the license tax.

Download
Off-Campus Download

Share

COinS