Search

We examine the extent to which public corruption influences the tax structure of American states. After controlling for other tax structure influences, we find that states with greater measured public corruption have more complex tax systems, have higher tax burdens, rely more heavily on regressive indirect taxes, and have smaller shares of their tax burdens with initial impact on business.These are significant structural impacts on the tax systems.

The U.S. Supreme Court ruling in South Dakota v. Wayfair, Inc. that states may require sellers without a physical presence to collect use taxes has generated much enthusiasm and dread among observers. We present new data on revenues from the state use tax between 2010 and 2017. We also present a unique monthly series of remote vendor use tax collections for Indiana before and after the Wayfair ruling and use the synthetic control method to derive a treatment effect of the policy change. While remote vendor registrations have tripled, we find there have been relatively modest impacts on state revenue.

This paper seeks to produce evidence on the labor incidence of the taxation of machinery and equipment purchases by manufacturers under the state general sales tax. Using quarterly data on manufacturing labor from the Quarterly Census of Employment and Wages between 2001 and 2012, we exploit tax policy discontinuities among adjacent counties along state borders. The results demonstrate that on average there are no significant losses or gains to manufacturing labor, but the effects are heterogeneous across manufacturing subsectors.

State revenue forecasts are a subject of seemingly constant critique from politicians, the media, and the academy over the nature of their outcomes as measured by the ability to accurately predict available resources. The opportunity to introduce political biases into the revenue baseline, making the budget envelope more or less constrained, has generated a near universal call for a depoliticization of the process. This also induces some to demand greater certainty and transparency with naive methods; others request increasingly sophisticated techniques in hopes of obtaining improved accuracy. This paper discusses the approach to revenue forecasting in the broader context of a political budget process, and subsequently it highlights the significance of a forecast that is politically accepted. This advances the literature beyond the measurement of forecast error as the sole outcome, because accuracy is irrelevant if the budget process does not respect the forecast as a political constraint. We provide a case illustration in Indiana by tracking the history of the state consensus forecast from the controversies surrounding its conception through its recent political challenges during the Great Recession.