Economic Stimulus and the Tax Code

James M. Williamson and John Pender ()

Public Finance Review, 2016, vol. 44, issue 4, 415-445

Abstract: This article investigates the impact of geographically targeted Federal tax relief enacted after Hurricane Katrina in 2005. The relief included provisions to replace lost income, mitigate uninsured losses, and stimulate business activity. Using propensity score and Mahalanobis metric (MM) matching methods, we develop difference-in-differences (DD) estimates of the impacts of these tax incentives on income and employment growth in the Gulf Opportunity Zone. Results show that per capita personal income, including earnings, increased more rapidly in counties treated with the tax provisions than in similar untreated counties, though the results only apply to counties with minimal damage. We do not find strong evidence of impacts on employment or population growth.

Keywords: Gulf Opportunity Zone Act; economic stimulus; taxation; federal tax relief; Hurricane Katrina (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:44:y:2016:i:4:p:415-445

DOI: 10.1177/1091142114557724

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