Date of Graduation
1993
Document Type
Dissertation
Abstract
My research investigates the consequences for equity between and within the regions of an economy when one region alters its taxing policy, and the tax change results in a corresponding change in public expenditure. In contrast to extant theory, I incorporate the effects of an accompanying change in public expenditure on tax incidence in my analysis. I demonstrate that actual tax incidence may be quite different from current predictions because the pattern of change in public expenditure has a significant effect on the ultimate incidence of a tax change. I develop a methodological framework to identify the impact of tax policy on the distribution of income among major economic groups within and between regions. I develop a two-region general equilibrium model with two factors and two products, in which one region levies taxes on factors or production, and provides public services out of tax revenues. I identify the factors that determine the nature and direction of the total impact of taxes, and examine the significance of a change in public services for tax incidence. I develop a numerical technique for the unambiguous evaluation of tax incidence in my model. The analysis indicates the dangers of making an a priori assessment of incidence without knowledge of the precise economic structure and income distribution of the regions of an economy.
Recommended Citation
Subrahmanyam, Sudha, "Inter-regional tax incidence with public services: A general equilibrium analysis." (1993). Graduate Theses, Dissertations, and Problem Reports. 9854.
https://researchrepository.wvu.edu/etd/9854