Though most studies find that sports stadiums are not strong drivers of economic activity in metropolitan areas, localized development effects may be sufficient to justify public subsidies for a host ...municipality if circumstances are favorable. This analysis examines the economic ramifications of an intra-metropolitan area relocation of Atlanta's professional baseball team from a traditional standalone downtown stadium to a new stadium-anchored mixed-use development in suburban Cobb County. Using the synthetic control method, the study employs metro-Atlanta counties to construct a counterfactual outcome for estimating changes in sales tax revenue after the ballpark opened. The findings indicate a net increase in taxable sales in the county; however, the magnitude of the effect is small and not statistically significant. Though net new spending is evident, approximately one-third of the project's sales appear to derive from crowding out other local economic activity. In total, added tax collections fall well short of covering the public subsidies provided by Cobb. The stadium's limited economic impact, despite its favorable location and ancillary mixed-use development, further supports past findings that sports venues are poor investments as economic development projects.
Written from a practical standpoint, this new edition of the Stamp Duty Land Tax Handbook details how the updated legislation works in common practice. The book's examples and case studies will be ...highly useful to surveyors, valuers and anyone needs to be kept up to date with the application of tax duty on Land. Unlike most other books in this area, the Handbook is based on practical experience of the work of surveyors applying the latest legislation in making valuations. The authors explain the potential pitfalls and use examples of calculations of the amounts on which tax is payable. Complex areas like administration and enforcement are clarified and explained. The Handbook will help surveyors and property professionals provide crucial support to their invididual and corporate clients.
The Supplemental Nutrition Assistance Program (SNAP) is the largest federal food assistance program in the United States and is designed to reduce food insecurity especially for low income working ...families, disabled people, and senior citizens. Although economists have extensively studied the factors influencing SNAP participation by eligible households as well as SNAP efficacy in reducing food insecurity, there has been no research on the potential link between the grocery food sales tax and SNAP participation rates, which is a less visible benefit of SNAP participation because participants are not taxed on their food purchases. The purpose of this research is to examine the impact of grocery food tax differences between state border counties on differences in SNAP participation. We collect food sales tax data from 2010 to 2017 including all 1184 counties on state borders in the United States, and almost one-half of those border counties (42.6% for 2017) had a sales tax on grocery food. Our results suggest that a 1% increase in the grocery tax difference between cross-border neighbors is associated with a 0.12% increase in the difference in county-level SNAP participation. That is, counties with higher grocery taxes than their neighboring counties have higher SNAP participation rates, which is likely due to the tax shielding feature of SNAP. This result has implications for states/counties that rely on the grocery tax for funding government programs.
•We examine whether grocery taxes provide an incentive to participate in the tax shielding Supplemental Nutrition Assistance Program (SNAP).•We use tax differences between adjacent counties on state borders as the source of variations in taxes and SNAP participation.•We find taxes present a significant incentive for SNAP participation to avoid paying some or all of the tax on grocery food.•An implication is there is a tradeoff between local tax revenue and federal subsidies when local governments impose grocery taxes.•The existence of SNAP makes the use of the sales tax on food less regressive in nature.
In June 2018, the Supreme Court ruled in favor of South Dakota's effort to tax remote sales in the South Dakota v. Way fair, Inc. case, creating a pathway for states to enforce economic nexus laws. ...However, many states do not yet meet the presumed requirements regarding the necessary simplification of sales and use taxes. A major harrier to simplification is local sales tax complexity, which is introduced through high levels of rate discretion, overlapping jurisdictions, and differences in tax bases. This analysis categorizes states based on the complexity of their local sales taxes to determine how this complexity may affect economic nexus laws moving forward.
The days of buoyant capital investment, jobs, and wealth are passing Alberta by as the boom-and-bust cycle runs its course and the global climate crisis becomes more acute. As the province scrambles ...to boost the dying oil economy and curb spending, one solution is all but ignored—a sales tax. In this collection, Alberta scholars and policy experts map out why and how a provincial sales tax can and should be implemented. They examine energy revenues, household incomes, and political support as well as opportunities for improving democracy and reducing the volatility of government revenues. Finally, this volume offers recommendations on structuring a consultative review process to improve Alberta’s long-term fiscal sustainability. Contributions by Ergete Ferede, Ian Glassford, Kenneth J. McKenzie, Melville McMillan, Elizabeth Smythe, and Graham Thomson.
Attention Variation and Welfare TAUBINSKY, DMITRY; REES-JONES, ALEX
The Review of economic studies,
10/2018, Volume:
85, Issue:
4 (305)
Journal Article
Peer reviewed
Open access
This article shows that accounting for variation in mistakes can be crucial for welfare analysis. Focusing on consumer under-reaction to not-fully-salient sales taxes, we show theoretically that the ...efficiency costs of taxation are amplified by differences in under-reaction across individuals and across tax rates. To empirically assess the importance of these issues, we implement an online shopping experiment in which 2,998 consumers purchase common household products, facing tax rates that vary in size and salience. We replicate prior findings that, on average, consumers under-react to non-salient sales taxes—consumers in our study react to existing sales taxes as if they were only 25% of their size. However, we find significant individual differences in this under-reaction, and accounting for this heterogeneity increases the efficiency cost of taxation estimates by at least 200%. Tripling existing sales tax rates nearly doubles consumers’ attention to taxes, and accounting for this endogeneity increases efficiency cost estimates by 336%. Our results provide new insights into the mechanisms and determinants of boundedly rational processing of not-fully-salient incentives, and our general approach provides a framework for robust behavioural welfare analysis.
Purpose
The purpose of this paper is to investigate the impact of tax audit, tax rate and tax penalty on sales tax compliance and examine the moderating effect of patriotism on the associations ...between tax audit, tax rate and tax penalty with sales tax compliance among Jordanian manufacturing small- and medium-sized enterprises (SMEs).
Design/methodology/approach
In this study, 660 questionnaires were distributed by using systematic random sampling to manufacturing SMEs in Jordan, after which a total of 385 useable questionnaires were deemed suitable for analysis. Partial least squares structural equation modelling (PLS-SEM) was used to validate the measurement model and structural model and the predictive relevance of the study’s model.
Findings
The findings showed that tax audit and tax penalty were positively associated with the level of sales tax compliance, whereas tax rate was insignificantly associated with sales tax compliance. They also demonstrated the moderating significant effect of patriotism on the relationship between tax penalty, tax audit and tax rate with sales tax compliance.
Research limitations/implications
Tax authorities and policymakers in developing majority societies in developing countries and in other Arab countries, especially in Jordan may use the results to focus their interest on the formulation of policies founded on the outcomes of the study to strengthen eligible SMEs to comply to further boost their sales collections.
Originality/value
This study extends the deterrence theory in the context of sales tax compliance by proposing the moderating effect of patriotism in the deterrence theory on sales tax compliance among SMEs. Moreover, the suitability for the use of PLS-SEM as a statistical tool in investigating the extended deterrence theory with patriotism as a moderating variable as well as its implications for theory and practice was also discussed.
Do state policies that allow municipal governments to levy economic development taxes stimulate economic development? Texas allows municipal‐level economic development corporation dedicated local ...option sales taxes (LOST), effectively diverting revenue from general fund purposes exclusively toward local economic development efforts. Drawing from a performance management framework focused on policy outcomes, the authors use a structural equation model to estimate the effects of local tax choices on economic development performance. The results reveal that municipalities implementing the 4a LOST tax choice (traditional industry‐related efforts) experienced a significant and positive effect on economic development as measured through a latent construct assessing five years of growth in population, property value, and new home construction. The observed impact of tax choice, though weaker than preexisting municipal economic capacity, suggests that states and municipalities can influence economic development activity by permitting municipal choice in the allocation of tax revenues dedicated to economic development.
This paper presents a parsimonious model of the bricks-and-mortar entry choice of online retailers in light of consumer sales taxes. On the one hand, a retailer benefits by entry since the second ...distribution channel enables it to reach new customers, giving it a leg up on rivals. On the other hand, physical entry typically compels the retailer to start collecting sales taxes even for online transactions, making its consumers particularly price sensitive. This paper examines this trade-off to characterize a retailer’s entry decision, as well as the market-level equilibrium of bricks-and-mortar penetration. The paper then layers in supply market considerations—namely, the retailer’s procurement of products from upstream suppliers. The analysis demonstrates that sales taxes not only reduce the consumers’ willingness to pay for products in the retail market, but also dampen the retailer’s willingness to pay for the products in the wholesale arena. This reluctance influences the clearing price in the supply market and, thus, the firm’s decision to establish the physical retail store.
This paper was accepted by Shivaram Rajgopal, accounting.
We present the first empirical analysis of the relationship between sales tax collection obligations, or nexus, and business activity. The recent Supreme Court decision in the Wayfair case upended ...the long-standing physical presence requirement for sales tax nexus, and opened the door for states to enforce sales tax collection obligations on remote sellers that have sufficient economic presence in the buyer’s state. In an effort to inform the ongoing policy discussion, we make use of state-level panel data to explore the extent to which changes in sales tax nexus were associated with changes in firm activity between 1979 and 2014. Our results suggest that increasing sales tax base breadth by 1 percentage point generates 0.14 percent additional firms and establishments and 0.2 percent higher employment levels. Furthermore, increasing the share of online companies with nexus by 1 percentage point translates into 0.1 percent additional (small) firms as the sales-tax-collection obligation is dispersed among a larger share of firms. Results from a simulation show that unwinding half of the observed base narrowing could have generated as many as 90,350 firms, 113,600 establishments, and 2.9 million jobs during the time period. These results provide suggestive evidence of the future impact of sales tax base recovery that will result from more neutral nexus standards in the post-Wayfair world.
PDF
