Principles for a Privilege-Free Tax System, with Applications to the State of Nebraska

47 Pages Posted: 7 Jun 2018

See all articles by Jeremy Horpedahl

Jeremy Horpedahl

George Mason University - Department of Economics

Date Written: 09/16/2014

Abstract

Tax codes in US states contain a wide variety of special privileges for specific industries, firms, individuals, and types of economic transactions. This paper outlines the main types of privileges in state sales, property, and income taxes. A detailed analysis of the tax privileges in the state of Nebraska provides information for a state that is in the process of potentially reforming its tax code. In Nebraska the total forgone revenue due to tax privileges amounts to just over $2 billion, compared with roughly $7.2 billion in total revenue collected by the relevant taxes. Eliminating these privileges and simultaneously lowering tax rates could save an average Nebraskan family more than $3,200 dollars if the benefits of tax reform are evenly distributed, with no reduction in government services.

Suggested Citation

Horpedahl, Jeremy, Principles for a Privilege-Free Tax System, with Applications to the State of Nebraska (09/16/2014). MERCATUS WORKING PAPER. Available at SSRN: https://ssrn.com/abstract=3191375 or http://dx.doi.org/10.2139/ssrn.3191375

Jeremy Horpedahl (Contact Author)

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

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