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This article explores the impact of property tax abatements on tax rates. Using the case study approach, the research uses data from Monroe County, Indiana, and finds that the impact of abatements on tax rates is negligible. The method consists essentially of calculating the difference between actual tax rates and hypothetical tax rates assuming abatement are not awarded. The results suggest that public officials may see in abatements a symbolic and relatively harmless policy tool for purposes of garnering political support from businesses and citizens. The article discusses these findings in light of current law suits brought against prominent abatement programs.

The retail sales tax has provided a strong foundation for American state government finance since its beginnings in the Great Depression. However, its position as a productive, reliable, and administrable revenue source is now under challenge from three forces. First, it continues as a tax primarily on purchases of tangible personal property, despite the shift in consumption toward services. Second, the physical presence rule for taxation of sales by remote vendors creates an intolerable imbalance between local and remote sellers. And third, legislatures keep gnawing away at the base with politically attractive but fiscally unjustifiable exemptions. In total, the position of the sales tax as a viable and defensible revenue alternative is at risk.

This paper analyzes the impact of economic downturns on the revenue and expense sides of city financing for the period 2003 to 2009 using a convenience sample of the audited end of year financial reports for thirty midsized US cities. The analysis focuses on whether and how quickly and how extensively revenue and spending directions from past years are altered by recessions. A seven year series of Comprehensive Annual Financial Report (CAFR) data serves to explore whether citiesʼ revenues and spending, especially the traditional property tax and core functions such as public safety and infrastructure withstood the brief 2001 and the persistent 2007 recessions? The findings point to consumption (spending) over stability (revenue minus expense) for the recession of 2007, particularly in 2008 and 2009.

The relationship between the local option sales tax (LOST) and property taxes and own source revenue is not well documented in the literature. This may be due in part to the aggregated nature of the data, which fails to capture different motivations for adoption of LOSTs. Using county-level data from 35 states, this study finds that LOSTs increase own source revenue and in some circumstances decrease property tax burdens. The primary contribution of this research is that it uses a policy variable, the LOST rate, to distinguish between the two types of counties that use their LOST revenues differently. This research represents the first step in bridging the gap between the LOST literature and the tax mix choice literature.

Texas, like more than a dozen other states, offers an annual sales tax holiday. At the state legislative level, the Texas sales tax holiday is intended to provide tax relief to working families timed to coincide with back‐to‐school purchases and to give a boost to brick‐and‐mortar retailers. Focusing on the consumer, this paper presents the results of a 2004 mall‐intercept survey of 710 shoppers concerning the Texas State tax holiday and finds: 1) the holiday is not only incredibly popular, but also very important to the decision to shop; 2) the tax holiday is most important to consumers with household incomes between $10,000 and $40,000 and purchase intentions between $100 and $750; and 3) the customers most motivated by the sales tax holiday to shop assign less importance to product price and more importance to mall location in their shopping decision.

Consumption taxes are an integral part of government revenue in countries around the world and are often subject to consumer evasion. The rapid rise of electronic commerce has exacerbated this problem as cross-border selling over the internet has enabled foreign businesses to sell and avoid collection and remittance of tax on their sales.

In this paper, we search for the solution to this problem through the analysis of three tax collection models: vendor, financial institution, and internet service provider (ISP). In addition, we examine administrative tools that enable more effective collection as well as inducements for taxpayers or collection agents to carry out their responsibility.

We conclude that the ISP collection model is not feasible at this time. On the other hand, we find that the vendor model, when supplemented with appropriate administrative tools and inducements, and the financial institution model, both represent viable options for policymakers to consider.

Private provision of public services has always been a factor in local government. In 1736 Benjamin Franklin and a group of civic leaders founded a fire company in Philadelphia because such a service was needed and the city could not provide it. Local municipalities often cannot provide the labor, equipment, and expertise to build roads, to do data processing, or to run hospitals but rather arrange with someone else who has the expertise to perform these tasks. However, during the 1970s rapid inflation, shrinking tax bases, and “no growth” budgets made the public provision of even what is popularly perceived as essential government services seem more like a tight‐rope walk than responsible government.