Local Revenue Hills: Evidence from Four U.S. Cities

Andrew Haughwout, Robert P. Inman, Steven Craig and Thomas Luce

No 9686, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We provide estimates of the impact and long-run elasticities of tax base with respect to tax rates for four large U.S. cities: Houston (property taxation), Minneapolis (property taxation), New York City (property, general sales, and income taxation), and Philadelphia (property, gross receipts, and wage taxation). Results suggest that three of our cities are near the peaks of their revenue hills; Minneapolis is the exception. A significant negative effect of a balanced budget increase in city property tax rates on city property tax base is interpreted as a capitalization effect and suggests that marginal increases in tax-financed city spending do not provide positive net benefits to property owners. Estimates of the effects of taxes on city employment levels for New York City and Philadelphia -- the two cities for which employment series are available -- show the local income and wage tax rates have significant negative effects on city employment levels. Cuts in these tax rates are likely to be an economically cost effective way to increase city jobs.

JEL-codes: H71 R13 (search for similar items in EconPapers)
Date: 2003-05
New Economics Papers: this item is included in nep-geo and nep-ure
Note: PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Published as Andrew Haughwout & Robert Inman & Steven Craig & Thomas Luce, 2004. "Local Revenue Hills: Evidence from Four U.S. Cities," The Review of Economics and Statistics, MIT Press, vol. 86(2), pages 570-585, 06.

Downloads: (external link)
http://www.nber.org/papers/w9686.pdf (application/pdf)

Related works:
Journal Article: Local Revenue Hills: Evidence from Four U.S. Cities (2004)
Working Paper: Local Revenue Hills: Evidence from Four U. S. Cities (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:9686

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w9686

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().