Individual Tax Rates and Regional Tax Revenues: A Cross-State Analysis

Regional Studies, Forthcoming

45 Pages Posted: 5 Jul 2010 Last revised: 22 Nov 2016

Hakan Yilmazkuday

Florida International University (FIU) - Department of Economics

Date Written: November 2, 2015

Abstract

This paper analyzes the effects of state-level personal tax rates on state tax revenue and individual welfare. The policy analysis based on a general equilibrium model suggests that tax revenues would benefit from higher wage-income, sales or property taxes, while any increase in dividend-income tax would result in a reduction of revenues. It is also shown that individuals would suffer from an increase in state-level wage-income tax, dividend-tax or sales tax, while they would benefit from an increase in property taxes. The heterogeneity across states is determined by a TaxIndex, a weighted average of initial taxes at the state level.

Keywords: Regional Taxes, State Tax Revenue, Individual Welfare

JEL Classification: H24, H71, R13, R51

Suggested Citation

Yilmazkuday, Hakan, Individual Tax Rates and Regional Tax Revenues: A Cross-State Analysis (November 2, 2015). Regional Studies, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1634628 or http://dx.doi.org/10.2139/ssrn.1634628

Hakan Yilmazkuday (Contact Author)

Florida International University (FIU) - Department of Economics ( email )

11200 SW 8th Street
Miami, FL 33199
United States

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