Rational Reactions to Temporary Sales Tax Legislation

Thomas Fullerton ()

Public Economics from EconWPA

Abstract: Budgetary difficulties in 1985 led the Idaho Legislature to adopt special fiscal measures. They included Agency appropriation cuts and a 14-month one-cent increase in the state sales tax. Similar steps had previously been taken in 1983. Data including the 1983 temporary tax hike period are analyzed to gauge the effectiveness and potential effects of the 1985 legislation. Structural econometric, univariate ARIMA, and cross section statistical tests indicate that Idaho consumers delay purchases in anticipation of sales tax rate reductions.

Keywords: Idaho; Sales Tax Legislation; Consumer Reactions (search for similar items in EconPapers)
JEL-codes: H71 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pbe
Date: 2004-08-19
Note: Type of Document - doc; pages: 8
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwppe:0408004

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