Federal taxation and the supply of state debt

Article Abstract:

The impact of federal tax policy on the supply of municipal bonds is examined. There is a big correlation between the after-tax rate of return to community residents and the municipal bond interest rate for bonds issued by that community. Such sensitivity imparts an upward bias to revenue estimates derived by federal taxation of all municipal bond income. A model is constructed and tested with data from 40 state governments over a seven-year time frame. The research findings indicate little justification for the exemption of municipal bond interest income from federal taxation.

Models, Supply and demand, Intergovernmental fiscal relations, State bonds, Municipal bonds

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Problems with integrating corporate and personal income taxes in an open economy

Article Abstract:

The advantages of integrating corporate income taxes with personal income taxes was studied. There are arguments that corporate income taxes separate from personal income taxes results in double taxation. Integration could be advantageous since it increases the incentive to save and invest, it discourages avoidance of corporate income tax and negates tax disadvantages to shareholders. A taxonomicframework for tax integration in closed and open economies was presented. It was concluded that the advantages imputed to integration will not hold in open economies.

Corporate income taxes, Income tax, Double taxation

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The consequences of overlapping tax bases for redistribution and public spending in a federation

Article Abstract:

A vertical fiscal externality that mirrors the impact of state policies on federal revenues, offers an inducement for state taxes to be extremely progressive. A horizontal fiscal externality results in non-ideal state taxes and costs due to the migration effect. The federal government enforces its own linear progressive tax and conducts transfers to the states. The federal government can revoke both externalities through propert fiscal regulations.

Administration of General Economic Programs, Economic Planning & Research, Economic conditions, Government spending policy, Income distribution

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