A Regional Computable General Equilibrium Analysis of Property Tax Rate Caps and a Sales Tax Rate Increase in Indiana

Nalitra Thaiprasert (), Dagney Faulk and Michael Hicks

Public Finance Review, 2013, vol. 41, issue 4, 446-472

Abstract: We use a regional computable general equilibrium (CGE) model and Indiana data to examine both the short-run and the long-run effects of property tax rate limits and an increase in the sales tax rate. We find that the property tax caps and sales tax rate increase have a relatively small impact on aggregate economic measures in the short run and a positive effect in the long run. Higher-income households experience larger increases in income than lower-income households in terms of the dollar amount of the increase, but lower-income households experience larger gains as a percentage of labor income. The value of output (sales) increases in the long run with construction, certain manufacturing industries, and wholesale trade experiencing the largest increases.

Keywords: property tax limits; tax and expenditure limits; sales tax rates; computable general equilibrium models (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:41:y:2013:i:4:p:446-472

DOI: 10.1177/1091142112463725

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