Bremse oder Gaspedal? Eine empirische Untersuchung zur Wirkung der direkten Demokratie auf den Steuerstaat

This article analyzes the relationship between the different forms of direct democratic participation and the size of the tax state in the Swiss cantons for the period from 1983 to 2000. The analysis distinguishes between the different effects of the financial referendum and the initiative. Theoretical arguments suppose that the financial referendum curb the tax state, whereas the initiative is expected to contribute to its growth. Pooled time series analyses show that legal conditions of direct democratic participation in general and especially the legislation on financial referenda are much more important than the frequency of plebiscites for the explanation of the different sizes of the tax states in the cantons. As an additional result of the analyses, the impact of direct democracy on the tax state turns out to be much larger in the 1990s compared to the decade before.     

Evidence on voter preferences from unrestricted choice referendums

From 1939 to 1968 Florida used a unique referendum system to set property tax rates for public school operating expenditures at the median millage rate selected by voters. These referendums revealed the entire distribution of voter preferences, which is not possible in the standard up or down referendum. We are the first to use the Florida referendum data. The form of the ballot played an important role in how people voted. Voting machine elections were much more likely than paper ballots to result in rejections of the recommendations of school boards, and produced much greater dispersion of expressed preferences.     

Testing the Mill hypothesis of fiscal illusion

According to the “Mill hypothesis”, the tax burden from indirect taxation is underestimated because indirect taxes are less “visible” than direct taxes. We experimentally test the Mill hypothesis and identify tax framing as a cause of fiscal illusion. We find that the tax burden associated with an indirect tax is underestimated, whereas this is not the case with an equivalent direct tax. In a referendum to tax and redistribute tax revenue, fiscal illusion is found to distort democratic decisions and to result in “excessive” redistribution. Yet, voters eventually learn to overcome fiscal illusion.     

Changing the Federal Tax Philosophy: A National Value-Added Tax or Retail Sales Tax?

Moving the federal government from its heavy reliance on taxes on income and profits to taxes on general consumption has been proposed as a way to improve equity, economic efficiency, and transparency of the tax system. The value-added tax and the retail sales tax offer economically equivalent approaches to general consumption taxation, differing only in how they are administered. A comparison of the two taxes as they now operate, however, suggests considerable advantage for the value-added tax as a national revenue source. Only in terms of requiring fewer businesses to collect the tax is there an advantage to the retail sales tax. The value-added tax is superior or equivalent to the retail sales tax in other important fiscal criteria.     

State Sales Tax Policy in a Changing Economy: Balancing Political and Economic Logic Against Revenue Needs

Soon after implementation in the 1930s, the general sales taxes emerged as the largest state tax source. In 1990, income taxes produced nearly as much state revenue as did sales taxes. Although income tax revenue have increased significantly, the sales tax is not in jeopardy of being replaced in the immediate future. The sales tax still remains a vital state fiscal concern, particularly to those states without a broad individual income tax.     

The political economy of sales taxes and sales tax exemptions

I analyze the choice politicians face when seeking votes from groups that lobby for sales tax rate decreases or tax exemptions, given the constraint that politicians want to raise a certain amount of revenue. Using data on sales taxes, I develop a model predicting a positive relationship between the number of exemptions and the sales tax rate. The estimation results provide support for this prediction. Each additional exemption is associated with an increase of between 0.10 and 0.25 percentage points in the tax rate.

     

Unintended Consequences of Local Sales Tax: Capitalization of Sales Taxes into Housing Prices

Local governments are under pressure to look for alternatives to property taxes as their main revenue source. One response has been to adopt local sales taxes. Prior studies offer little guidance on whether and how much local governments enhance their revenue capacity with local sales taxes. This article unveils the underlying mechanisms by exploring the capitalization of sales taxes into housing prices as a property tax base measure. The empirical analysis reveals a capitalization of local sales taxes into housing prices, indicating the reduction of property tax bases in higher sales tax areas from the long-term perspective. The findings suggest that a sales tax rate increase might not raise local revenue capacity as much as policymakers intend.     

Sales and Use Tax Simplification and Voluntary Compliance

Because of difficulties collecting sales taxes on Internet sales, several states have engaged in an effort (the Streamlined Sales Tax Project, SSTP) to simplify their sales tax systems. One hope among SSTP proponents is that a simplified system will result in Internet vendors voluntarily collecting the sales tax. We address two issues:

• ? Will states adopt the extensive reforms proposed by the SSTP?
• ? Will vendors voluntarily collect the sales tax?

We argue that states are unlikely to adopt extensive reforms, but if they did, many vendors would voluntarily collect sales taxes.     

Tax Base Composition and Revenue Volatility: Evidence from the U.S. States

This study examines the effect of tax base composition on revenue volatility, with focus on state general sales tax and individual income tax. In doing so, extensive historical data (1992–2007) are presented on state taxation of various categories of sales and incomes that exhibit wide cross‐state variations in taxable status, and revenue volatility is measured using the deviation‐from‐trend approach. Models of sales and income tax volatility are estimated using pooled OLS, and the analyses reveal that revenue volatility is significantly affected by how the tax base is composed. The paper concludes by discussing the policy implications of the results.     

Worldwide experience in sales taxation: Lessons for North America

Worldwide fiscal experience over the past twenty-five years indicates steady expansion in the political and academic constituency for expenditure taxation, including indirect taxes on consumption. Retail levies have emerged as the preferred method of indirect taxation of consumption, as older, pre-retail sales taxes have proven unsuited to modern economic structures. Increasingly, reform of sales taxation has involved a shift to one particular form of tax, the European Community type of value-added tax (VAT). This consumption tax option is again a topic of policy debate in North America, particularly in Canada where a VAT was under active consideration in 1985.This paper sifts through worldwide experience with broad-based sales taxes to identify lessons for tax policy in North America both in the short and longer-run. It indicates that the reputation of such taxes as regressive instruments may have been much exaggerated, and that in any case methods are available, particularly in Canada, for resolving equity issues in sales taxation. The VAT is shown to have marginal economic and administrative advantages over single-stage federal retail taxes in both Canada and the US. However, these advantages are not nearly so significant as in European countries where the VAT was adopted there. Further, sensible debate over the merits and limitations of the VAT in North America will call for much closer scrutiny of the problems unique to this form of tax. Finally, three political issues that were not significant in Europe will likely have an important bearing on any future choices of sales tax instruments, both in the U.S. and in Canada.     

Immigration and income redistribution: A political economy analysis

This paper examines the effect of immigration on the extent of income redistribution via majority voting on the income tax. The tax outcome depends on the size of the native majority and the initial amount of redistribution in the economy, which in turn determines the skill composition of immigrants. As a main result, we derive conditions for multiple tax equilibria: if the native majority of either skilled or unskilled is not too strong and immigrants are allowed to vote, both a high-tax and a low-tax outcome is possible. In a referendum, natives will then vote against immigrant voting. At best, natives are indifferent towards immigrant voting.     

Price Effects around a Sales Tax Holiday: An Exploratory Study

Tax relief from a sales tax holiday depends on lower final prices for the eligible goods. In this article, prices are compared for ten goods across several retail locations before, during, and after the 2001 Florida sales tax holiday period. The comparison is also extended to the same items in a metropolitan statistical area just outside of Florida. The exploratory data indicate that before-tax prices are slightly higher in Florida retail establishments during the sales tax holiday, but it is not clear whether these prices reflect less generous markdowns by Florida managers or pricing decisions for much larger regions. Whichever the case, the tax policy forces consumers to speculate on non-holiday prices and choose items where the final price is, in fact, lower during the holiday.     

Administrative problems of the provincial sales tax on beer in Papua New Guinea

With the establishment of provincial government in Papua New Guinea, the Organic Law has conferred on the provincial governments the authority to raise revenue using local revenue bases including retail sales taxes. These taxes have significant advantages and a sales tax on beer has particular benefits in P.N.G. in terms of potential yield and ease of administrative management. The tax is levied on the two breweries and the breweries collect the tax at their breweries and wholesale warehouses on behalf of the provincial governments. For the brewery with the dominant share of the market the arrangement under which it collects the tax for a commission and pays over quarterly to the provincial governments brings financial advantage. The brewery with a smaller share of the market and localized sales is less likely to be benefitting by the arrangement. For the future given expected beer consumption a change from a quantity based tax to ad valorem rates would be financially advantageous to the provincial governments, and would reduce the need for some provinces to seek tax sources elsewhere, but experience shows the general benefit of raising the tax, not at the point of final sale, but on the wholesaler or manufacturer.     

Tax exporting,federal deductibility,and state tax structure

This paper studies the interaction between the federal and state tax systems during the 1980s and, in particular, considers how the Tax Reform Act of 1986 affected state tax structure. Using a panel data set on state governments over a nine-year period, I estimate tax share equations for six categories of taxes. I find that the state personal income tax is sensitive to changes in its tax price, but find a much smaller sensitivity to changes in tax prices for the general sales tax. I then consider various reasons why the sales tax does not exhibit a sensitivity to changes in tax price and consider the implications of these results for policymakers. The regression results suggest that different income groups are concerned with different tax instruments. Moreover, the results motivate a possible benefit approach to taxation at the state level. Linking taxes, about which a particular income group is most concerned, to services received by that group might generate additional political support for state tax systems during a time when many states are facing fiscal crisis.     

An Analysis of the Time to Adoption of Local Sales Taxes: A Duration Model Approach

The timing of the decision of local governments to adopt a local sales tax is explored in a duration model with time‐varying covariates. Our framework suggests a set of factors associated with the decision to adopt a local sales tax and we find empirical support for these factors. We also consider whether the adoption by one jurisdiction depends on the adoption by neighboring jurisdictions and find empirical support for interdependency of behavior.     

Does the Local‐Option Sales Tax Provide Property Tax Relief? The Georgia Case

This study examines the effect of a one percent local-option sales tax (LOST) on property tax level, millage rate, and total spending level in Georgia counties. The study covers a 13-year period for 136 Georgia counties. The findings suggest that the law, which requires rollback of property taxes when the LOST is used, led to actual property tax relief as well as millage rate reduction. Regression results show that counties collecting the LOST tend to have per capita property taxes that are an average of $12 or 1.8 mills lower than counties that do not collect the tax. Whereas an extra dollar of LOST revenue provides about 28 cents in property tax relief, it leads to an increase in total spending of about 48 cents. In sum, the LOST has achieved the objectives of property tax relief, but on balance it is more an augmentation of than an effective substitute for property taxes in Georgia counties.     

The partisan politics of gold: Switzerland and the sale of gold

This paper explores the relative strength of social, economic and political factors in determining public attitudes towards the sale of a portion of Switzerland's gold reserves and how the money realised from these sales should be used. Partisan political allegiance and generational economic interest are the major factors in determining attitudes towards gold sales in Switzerland in the early 2000s. Cantons and individuals that had supported the Swiss People's Party were more inclined to support its Gold Initiative than supporters of the Swiss Social Democratic Party and other parties of the left which actively campaigned against it. This pattern suggests that, contrary to the suggestions of previous studies, Swiss political parties can play a substantial role in framing political options in referendum campaigns.     

Dynamic Revenue Curves for North Carolina Taxes

Dynamic tax analysis allows a tax rate to affect the economic base being taxed. Consequently, the relationship between a tax rate and the taxed economic base is nonlinear and includes a region where a higher (lower) tax rate results in lower (higher) tax revenues. Relationships between the economic base and the tax rate are estimated for five major taxes in North Carolina. In all but one case, a statistically significant negative effect was found for the tax rate on the economic base. Dynamic relationships were strongest for the sales tax and weakest for the unemployment compensation tax.     

Fiscal Structure and the Post-Proposition 13 Fiscal Regime in California's Cities

Two and a half decades after the passage of Proposition 13 in 1978, California state and local governments continue to feel the intended and unintended effects of tax and expenditure limitations. While considerable time has passed since voters enacted Proposition 13, the effects of the property tax revolt continue to be dramatic. This article examines the fiscal structure of California's city governments from 1972 to 2002. The analysis reveals that California's cities have become less reliant upon property tax revenues and more reliant upon charges and fees, and have not increased reliance upon sales tax revenues as much as expected.     

The Pass‐Through of Taxes on Sugar‐Sweetened Beverages to Retail Prices: The Case of Berkeley,California

Obesity and diet‐related chronic disease are increasing problems worldwide. In response, many governments have enacted or are considering taxes on energy‐dense foods. Perhaps the most commonly recommended policy is a tax on sugar‐sweetened beverages (SSBs). This paper estimates the extent to which a tax on SSBs is passed through to consumers in the form of higher prices. We examine the first city‐level tax on SSBs in the United States, which was enacted by the voters of Berkeley, California, in November 2014. We collected the prices of various brands and sizes of SSBs and other beverages before and after the implementation of the tax from a near‐census of convenience stores and supermarkets in Berkeley, California. We also collected prices from stores in a control city: San Francisco, where a similar voter referendum failed despite majority support. Estimates from difference‐in‐differences models indicate that, across all brands and sizes of products examined, 43.1 percent (95 percent confidence interval: 27.7 to 58.4 percent) of the Berkeley tax was passed on to consumers. The estimates also are consistent with cross‐border shopping. For each mile of distance between the store and the closest store selling untaxed SSBs, pass‐through rose 33.3 percent for 2 L bottles and 25.8 percent for 12‐packs of 12 ounce cans.