However, nor do they encourage it. Taxes on consumption are
neutral between consumption and saving. For a more detailed discussion of this
matter see Chapter II in: Schuyler, Michael A., Consumption Taxes: Promises and Problems, Institute for Research on the Economics of Taxation, Fiscal Issues
series, No. 4, 1984.
Tiebout, Charles, "A Pure Theory of Local Expenditures,"
Journal of Political Economy, Vol. 64, October 1956, pp. 416-24.
As reported in Washington Post, February 6, 1994, p. C5.
See Schuyler, p. 18; and James Davies, Francis St. Hilaire,
and John Whalley, "Some Calculations of Lifetime Tax Incidence," American
Economic Review, September 1984, pp. 633-49.
Anderson, Patrick L., "Proposal A: An Analysis of the June
2, 1993 Statewide Ballot Question," Mackinac Center for Public Policy, May 1993,
For a brief summary of this more recent body of research,
see: Vedder, Richard, "Tiebout, Taxes, and Economic Growth," Cato Journal, Vol.
10, No. 1 (Spring/Summer 1990), pp. 101-103.
Vedder, Richard, "State and Local Economic Development
Strategy: A Supply Side Perspective," Joint Economic Committee of the U.S.
Congress, October 1981.
Ibid., p. 340.
Iowa Tax Education Foundation, "The Iowa Exodus: Why Are
People Leaving This State?" 1987.
Dye, Thomas, "State Income Taxation: Fueling Government,
Stalling the Economy," in Tex Lezar, ed., Making Government Work: A Conservative Agenda for the States, Texas Public Policy Foundation, 1992, pp. 363-81.
Vedder, Richard, "Rich States, Poor States: How High Taxes
Inhibit Growth," Journal of Contemporary Studies, Fall 1982, pp. 19-32.
Ibid., p. 22.
Moore, Stephen, and Dean Stansel, "The Myth of America's
Underfunded Cities," Cato Institute Policy Analysis No. 188, February 1993, pp.
Moore, Stephen, "Taxing Lessons from the States: Why Much
of America Is Still in a Recession," Joint Economic Committee of the U.S.
Congress, October 1993.
"Enacted revenue increases" refers to increases in revenue
that stem directly from an explicit change in the state tax code.
Stansel, Dean, unpublished research, Cato Institute, 1994.
(Available from the author upon request.)
"The state sales tax was cut from 8 percent to 6 percent.
However, the base was also broadened to include various services, and several
exemptions were weakened.
"Despite Well-publicized Layoffs, Job Growth Has Outpaced
Losses," Washington Times, October 18, 1993, p. A14.
U.S. Bureau of the Census.