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The Tax Increment Financing (TIF) method has achieved widespread popularity as a funding source to finance local infrastructure investments and improvements. However…
The Tax Increment Financing (TIF) method has achieved widespread popularity as a funding source to finance local infrastructure investments and improvements. However, little research has been conducted to evaluate the effectiveness of such programs. This study undertakes a regression analysis to examine the effects of the municipal adoption of TIF programs on local economic development. The empirical results suggest that the adoption of TIF programs has a significant positive effect on local employment.
Geographical relocation of ventures, together with rates of firm formation and closure, determine the entrepreneurial population dynamics of a region. However, venture…
Geographical relocation of ventures, together with rates of firm formation and closure, determine the entrepreneurial population dynamics of a region. However, venture migration has remained largely unaddressed by prior entrepreneurship scholars. This paper draws from theoretical frameworks and prior findings in the economic demography literature to explore policy and environmental determinants of regional venture migration rates, referred to as entrepreneurial transience. Using county-level data for the state of Ohio, we show that local taxation is an important driver of entrepreneurial transience. In particular, local income tax rates are found to be negatively related to subsequent net transience – i.e., venture migration deficits or surpluses. Local business property taxes also influence net transience, but the direction of their impact depends on the average income level in the locale.
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 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.
Local governments are expanding their revenue portfolios and becoming less dependent on property taxes. It should not be assumed, however, that this diversification is…
Local governments are expanding their revenue portfolios and becoming less dependent on property taxes. It should not be assumed, however, that this diversification is increasing the stability of local governmentsʼ own source revenue, as previous research suggests. It is thus important for local government officials to know how this process will affect the stability of their own source revenue, as they are almost certainly diversifying away from a stable tax, the property tax (Groves and Kahn, 1952; McCubbins and Moule, 2010), and moving toward a more volatile tax, such as the sales tax. Using county-level data in thirty-five states, I examine the effect of local option sales taxes (LOSTs) on the volatility of own source revenue and find that greater use of LOSTs increases revenue volatility.
The purpose of this paper is to make policy recommendations for the current fiscal decentralization discussion by examining the operating mechanisms of local taxes, unconditional grants, and conditional grants within the fiscal relationships between the national government and local governments in Korea.
After examining the current fiscal relationships between the national government and the local governments, this paper analyzes trends of local taxes, unconditional grants from both national and high-level local governments, and conditional grants from both national and high-level (or provincial level) local governments between 2002 and 2015. Local governments are classified into high-level local governments, and three types of low-level local governments are: si, kun, and ku.
Since the structure of local government finances in Korea is very complicatedly intertwined, the present decentralization discussion regarding increasing the share of local tax revenues may not achieve its purpose of fiscal decentralization. The authorities in charge of revenue allocation should be first decentralized at high-level local governments; high-level local governments should then arrange unconditional and conditional grants from high-level local governments to low-level local governments while taking into consideration unconditional and conditional grants from the national government to low-level governments.
The dichotomy between the central government and local municipalities has been utilized in the existing discussion regarding fiscal decentralization in Korea, but this study highlights the important resource allocation roles of high-level local governments.
Local governments in the U.S. rely less on the property tax than they have historically. This long-term trend has been accompanied by important shifts in the composition…
Local governments in the U.S. rely less on the property tax than they have historically. This long-term trend has been accompanied by important shifts in the composition of local revenues. While the property tax still serves as one primary source of local government revenue, increasingly other sources are used to pay for local government. This paper first examines that trend, the forces behind it, and its regional impact. We then explore trends in three central states - - Iowa, Nebraska, and Arkansas -- that have experienced substantial revenue shifts in recent years. A concluding section discusses the options for the future.
The purpose of this paper is to give a recommendation to the municipalities what local tax/taxes sensu largo (a waste charge or an immovable property tax increased by a…
The purpose of this paper is to give a recommendation to the municipalities what local tax/taxes sensu largo (a waste charge or an immovable property tax increased by a local coefficient) are to be collected to achieve expected and necessary incomes and limit the administrative costs.
To reach the aim, it was necessary to analyze the number of municipalities increasing the property tax by the local coefficient and abolishing the charge on communal waste to save money for the waste charges administration. The evidence of municipalities applying the local coefficient was used as a basis for the research. To get the information on charges on communal waste collected in these municipalities with the local coefficient within the past at least five taxable periods, the information from Monitor was used. If there was any such a significant change, then it was necessary to use the bylaws and to do thorough analysis of the reasons.
The hypothesis that a high number of municipalities in the Czech Republic are replacing the charge on communal waste with the local coefficient applicable for the immovable property tax was rejected. In the opinion of the author, the ideal approach is to have just one local tax – immovable property tax. This tax is administered by the state tax office and the revenue should cover the cost of waste management. Adopting only the property tax increased by the local coefficient, it is necessary to explain the benefits to the taxpayers, that is, locals and voters.
The research on the given topic was never done in the Czech Republic, as there is no evidence of local charges collected in individual municipalities.
This study aims to explore the underlying patterns in tax innovation. Prior studies of local sales taxes still leave a gap in the literature and render the results…
This study aims to explore the underlying patterns in tax innovation. Prior studies of local sales taxes still leave a gap in the literature and render the results inconclusive because the studies cover either state level or localities within a single state for a short period. To cover the gap, we assemble a dataset of counties in all states for FY1970-2006 but focus on 12 states not threatened by intra-jurisdictional competition. Our empirical analyses yield evidence that a county adopts local sales tax for political and economic rationale rather than fiscal condition. Accordingly, regional diffusion has positive effects on local sales tax adoption in a county. These findings contribute substantively to sales tax literature while confirming policy diffusion.