Session Recap: Responses to Incentives in Taxation
November 8, 2014 11:00 AM
By Bijetri Bose, University of Washington
Panel Chair: Daniel L. Smith, New York University
Discussants: Bradley Heim, Indiana University and Spencer T. Brien, Arizona State University
Alternatives to Tax Credits in North Carolina: Distributional Effects of a Revenue Neutral Corporate Income Tax Reduction by G. Jason Jolley, The Ohio State University and Roby B. Sawyers, North Carolina State University
Just Another Levy? A Look at the Factors Influencing Ohio Communities' Use of Property Tax Levies to Fund Public Servicesby Jenny Brodie, The Ohio State University
Analysis of State General Sales Tax Policy-Focusing on Efficiency (Revenue Adequacy) and Fairnessby Koomin Kim, Florida State University
When the Tax Man Cometh: The Impact of Sales Tax Policy on Nonprofit Density and Service Provisionby Sarah Larson, Indiana University-Purdue University Indianapolis and Kellie McGiverin-Bohan, Indiana University
The panel on Responses to Incentives in Taxation had an interesting mix of presenters discussing various aspects of sales tax, property tax, and tax credits. Leading the session was G. Jason Jolly, Assistant Professor at The Ohio State University, whose paper is the outcome of an evaluation project on the effectiveness of the North Carolina’s economic development programs. In it, the authors examined the reductions in the state corporate tax revenue if incentive programs were eliminated. The particular incentive program that was tested was the William S. Lee Act tax credit in the state that allows companies to take a tax credit for qualifying job creation, machinery and equipment investment, or research and development investment.
Next was a presentation by Koomin Kim, currently in the first year of the doctoral program at Florida State University—a noteworthy achievement as mentioned by one of the discussants. The paper deals with the issues of revenue adequacy, efficiency, and fairness of general sales tax of states. According to the analysis, the state of Hawaii had the highest revenue adequacy as well as fairness among 45 states.
In her paper, Just Another Levy? A Look at the Factors Influencing Ohio Communities' Use of Property Tax Levies to Fund Public Services, Jenny Brodie, a graduate student from The Ohio State University, focused on property taxes, whose appeal lies in its relative elasticity during economic downturns but is unpopular among citizens. The paper investigates the characteristics of communities that frequently go to the ballot with a property tax levy and those that do not pass a property tax levy.
Sarah Larson, also a graduate student at the Indiana Purdue University Indianapolis, looked at the impact of changing sales tax exemption policies on the density and extent of nonprofit service provision across the 45 American states. This analysis has implications for local policy makers as well as for the service providers. The two discussants, Heim and Brien, provided in-depth feedback to the presenters. Their comments and the following discussion with the audience highlighted the importance of motivating research papers with their policy implications in mind.