tag:blogger.com,1999:blog-3471471289744825428.post8740307678663725274..comments2024-03-11T00:31:41.186-07:00Comments on The Oregon Economics Blog: Long-Term Stability of Sales Taxes - An ExamplePatrick Emersonhttp://www.blogger.com/profile/17242234148546323374noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-3471471289744825428.post-86031389236215554602007-12-26T10:26:00.000-08:002007-12-26T10:26:00.000-08:00A confounding factor that Oregon uniquely has to d...A confounding factor that Oregon uniquely has to deal with relates to elasticities (I think).<BR/><BR/><I>Of course you can make the opposite argument as well, that once personal incomes started growing at normal rates again the income tax would have more quickly regained the lost revenues than would a sales tax</I><BR/><BR/>The problem is that these quick rebounds may not be predictable two years out. As was the case in '07, incomes grew, but we were unable to apply the gains to the budget--effectively making up for the losses in 02-03--because the state economist didn't foresee that level of growth. The $1 billion that should have gone to state services that have formerly taken cuts instead went back to taxpayers.Jeff Alworthhttps://www.blogger.com/profile/02930119177544342495noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-44216667264400532802007-12-24T15:53:00.000-08:002007-12-24T15:53:00.000-08:00This comment has been removed by the author.darrelplanthttps://www.blogger.com/profile/01801730464465436988noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-88725759434102063142007-12-24T13:02:00.000-08:002007-12-24T13:02:00.000-08:00"I think the last abstract is quite instructive."T..."I think the last abstract is quite instructive."<BR/><BR/>That one grabbed me as well. I clipped a few comments on that one in particular in editing, but one of the primary concerns I have is that externalities are not well captured by the economic growth metrics.<BR/><BR/>With both minimum wage levels and indoor smoking bans we have seen recent evidence that contradicts the expected impacts, reflecting an unanticipated (or unaccounted) good.<BR/><BR/>The balancing act of leveraging how government spends our money against how much it collects is a fascinating topic.<BR/><BR/>Sadly, I don't get to talk about it at many parties either.Stevellehttps://www.blogger.com/profile/02024342556990246686noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-62102544572360497682007-12-24T12:27:00.000-08:002007-12-24T12:27:00.000-08:00Stevelle,It seems pretty clear that there is no su...Stevelle,<BR/><BR/>It seems pretty clear that there is no substitute for a rainy day fund, even if a sales tax could have some moderating effect (and I think the evidence is that we cannot count on that). The mechanics of a rainy day fund are very difficult to imagine, however, and the evidence I have seen is that such funds need to be large. So politically, I am worried that it might not be feasible. But in this blog I am trying to stick to the economics and let others discuss politics. <BR/><BR/>What I am going to try to do is figure out what the evidence says about how big are the distortions that come from a high income tax (or, more to the point perhaps, a high relative income tax). I will try and do the same for sales taxes. This may all end up being too small to worry about. Ditto concerns about being 'too progressive'. I shall have more soon I hope. I don't expect to have any concrete answers at the end - I don't think the obviously right choice will emerge, but I do hope to point out a number of factors we should think about when considering tax reform and how serious these are. <BR/><BR/>I think the last abstract is quite instructive (and the finding has been confirmed in another paper by UO economists): it is not just the tax itself, but how it is spent that matters. It also gets back to an earlier post I wrote about business not necessarily wanting lower taxes, they want good physical and human capital infrastructure and are willing to pay for it.Patrick Emersonhttps://www.blogger.com/profile/17242234148546323374noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-66111131557632822962007-12-24T12:03:00.000-08:002007-12-24T12:03:00.000-08:00Is it possible to capture the elasticity of income...Is it possible to capture the elasticity of income taxes with a rainy-day fund and achieve a similar degree of revenue stability? That clearly depends on having fiscal discipline in spending, but Oregon's forecasting system helps achieve that already.<BR/><BR/>I have a lot of questions left by the abstract of that paper by Feldstein & Wrobel in particular. (I should see if I can get access to it.) <BR/><BR/>But I tried (failed?) to keep my comment more general than that. <BR/><BR/>And maybe I'm entirely wrong and we need to achieve any progressivity of the tax structure at the federal level (where employees have less mobility), and stick at the state level to elbowing our neighbors out of the way to reduce income tax on the well-to-do.Stevellehttps://www.blogger.com/profile/02024342556990246686noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-68962771448974950992007-12-24T11:59:00.000-08:002007-12-24T11:59:00.000-08:00This comment has been removed by the author.darrelplanthttps://www.blogger.com/profile/01801730464465436988noreply@blogger.comtag:blogger.com,1999:blog-3471471289744825428.post-50744370915109544482007-12-24T00:07:00.000-08:002007-12-24T00:07:00.000-08:00This comment has been removed by the author.darrelplanthttps://www.blogger.com/profile/01801730464465436988noreply@blogger.com