The Effect of Federal Tax Deductibility on State and Local Taxes and Spending

Gilbert Metcalf and Martin Feldstein

Scholarly Articles from Harvard University Department of Economics

Abstract: This paper examines the effect of federal deductibility of state and local taxes on the fiscal behavior of state and local governments. The primary finding is that deductibil ity affects the way that state and local governments finance their sp ending as well as the overall level of spending. More specifically, i n states in which federal deductibility implies a relatively low cost of using deductible personal taxes (including income, sales, and pro perty taxes), there is greater reliance on those taxes and less reliance on business taxes and other revenue sources. The effect of deductibility on the state and local financial mix implies that deductibility has a much lower cost to the federal government than has previously been assumed.

Date: 1987
References: Add references at CitEc
Citations: View citations in EconPapers (57)

Published in Journal of Political Economy

Downloads: (external link)
http://dash.harvard.edu/bitstream/handle/1/2766699/feldstein_federal.pdf (application/pdf)

Related works:
Journal Article: The Effect of Federal Tax Deductibility on State and Local Taxes and Spending (1987)
Working Paper: The Effect of Federal Tax Deductibility on State and Local Taxes and Spending (1986)
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:hrv:faseco:2766699

Access Statistics for this paper

More papers in Scholarly Articles from Harvard University Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Office for Scholarly Communication (osc@harvard.edu).