state revenue

The paper provides a conceptual review of how the impact of taxes on the incentive to invest in the corporate sector can be measured, focusing on measures derived from economic theory. Two measures are derived -- effective marginal and average tax rates -- which reflect different forms of investment decisions.

The authors consider the role of tax policy in shaping incentives for venture capital (VC) support of young firms, focusing on the effects of capital gains taxes and investment subsidies. They also examine the effects of introducing a uniform capital gains tax on both entrepreneurs and VCs.

Using vector error correction models of the economies of the six equalization-receiving provinces that received equalization payments without interruption during the 1961-1998 period, as well as a generalized impulse response analysis, the paper explores the dynamics of the interactions between flows of equalization payments and other key variable in the economies of recipient provinces.

In response to the tax debate over online merchandising, the Progressive Policy Institute report contends that Congress should grant states the right to require remote sellers to collect and remit sales taxes, if states eliminate all discriminatory rules and laws designed to protect in-state bricks-and-mortar companies from e-commerce competitors.

Property-tax competition among local governments is investigated within the paper. Results indicate the presence of a strategic interaction using cross-section data on property taxes and other socio-economic variables in the Boston metropolitan area.

The working paper by the National Bureau of Economic Research concludes that lowering personal tax rates in most cases appears to discourage entrepreneurial activity. The study finds that a reduction of 5 percent in the corporate tax rate correlates with a doubling of entrepreneurial activity. On the other hand, if personal income tax rates were reduced across the board by 5 percent, a 30 percent decrease in entrepreneurial activity follows.

The study begins with an assessment of the national economy and its prospects under different assumptions that will influence the outlook. Regional economic conditions and prospects are then considered and the report concludes with an examination of the outlook for state tax revenues.

The report from the Rhode Island Tax Policy for Success recommends eliminating all state taxes on long-term capital gains and providing incentives to encourage biotech start-ups and investment. The report identifies four specific recommendations for the state to consider to encourage high-wage.

The most recent edition of the Federal Reserve Research Roundup (3rd Quarter, 2001) includes a timely review of a recent working paper from the Federal Reserve Bank in Boston that looks at the relationship between corporate investment decisions and state and local taxes.

The General Accounting Office (GAO) report forecasts revenue losses for state and local governments ranging between one and eight percent by as soon as 2003. Internet sales will account for an increasing share of remote sales and may account for as much as 60 percent of the lost revenues in the GAOs most dire scenario of the report.