TY  - JOUR
AU  - Haughwout,Andrew
AU  - Inman,Robert
AU  - Craig,Steven
AU  - Luce,Thomas
TI  - Local Revenue Hills: A General Equilibrium Specification with Evidence from Four U.S. Cities
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7603
PY  - 2000
Y2  - March 2000
UR  - http://www.nber.org/papers/w7603
L1  - http://www.nber.org/papers/w7603.pdf
N1  - Author contact info:
Andrew Haughwout
Federal Reserve Bank of New York
33 Liberty Street
New York, NY  10045
E-Mail: andrew.haughwout@ny.frb.org

Robert P. Inman
Department of Finance
Wharton School
University of Pennsylvania
Philadelphia, PA  19104-6367
Tel: 215/898-8299
Fax: 215/898-6200
E-Mail: inman@wharton.upenn.edu

Steven G.. Craig
University of Houston
Department of Economics
204 McElhinney Hall
Houston, TX 77204-5019
E-Mail: scraig@uh.edu
AB  - We provide estimates of the impact and long-run elasticities of tax base with respect to tax rates for four large U.S. cities: Houston (property taxation), Minneapolis (property taxation), New York City (property, general sales, and income taxation), and Philadelphia (property, gross receipts, and wage taxation). Results suggest that all four of our cities are near the peaks of their longer-run revenue hills.  Equilibrium effects are observed within three to four fiscal years after the initial increase in local tax rates.  A significant negative impact (current period) effect of a balanced budget increase in city property tax rates on city property base is interpreted as a capitalization effect and suggests that marginal increases in city spending do not provide positive net benefits to property owners.  Estimates of the effects of taxes on city employment levels for New York City and Philadelphia   the two cities for which employment series are available   show the local income and wage tax rates have significant negative effects on city employment levels.
ER  -