NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Incidence and Allocation Effects of a State Fiscal Policy Shift: The Florio Initiatives in New Jersey

William T. Bogart, David F. Bradford, Michael G. Williams

NBER Working Paper No. 4177 (Also Reprint No. r1781)
Issued in October 1992
NBER Program(s):   PE

We calculate the incidence of recent changes to the New Jersey state tax system on a sample of homeowners. Our analysis distinguishes between business-as-usual responses to an evolving fiscal situation and tax changes that constitute a surprise. The latter have incidence effects; the former do not. We conclude that, if the changes carried out by NJ Governor Jim Florio are regarded as permanent, they effected a one-time wealth redistribution from, on average, higher-income homeowners toward lower-income homeowners and from owners of suburban residential property toward owners of urban residential property. Although effects on the averages for identifiable groups are clear and significant there is very considerable variation in the effects on individual homeowners within groups. We also estimate the allocation effects of the tax changes using a general equilibrium model that incorporates the option of in-and out migration. The results suggest that the changes will induce a sizable migration of weal thy and high-income people out of the state.

download in pdf format
   (316 K)

download in djvu format
   (268 K)

email paper

This paper is available as PDF (316 K) or DjVu (268 K) (Download viewer) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w4177

Published: National Tax Journal, Vol. XLV, No. 4, pp. 371-387 (December 1992).

 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us