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Proposition 4, Tax Reduction Mirage: An Exploratory Note on Its Potential Spending and Tax Impacts

Cebula, Richard and Chevlin, Linda (1980): Proposition 4, Tax Reduction Mirage: An Exploratory Note on Its Potential Spending and Tax Impacts. Published in: The American Journal of Economics and Sociology , Vol. 40, No. 4 (31. October 1981): pp. 343-348.

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Abstract

What would the true government expenditure and tax burden im­pacts of California's Proposition 4 likely be if it (or its equivalent) were enacted in all 50 states? What happened to actual state plus local government expenditures per capita over the period 1970-1976 is examined. Next, we examine what would have happened to such expenditures (per capita) if Proposition 4 had been in effect over the same period. Comparing the results reveals that Proposition 4 might have exercised little impact over per capita state plus local spending levels. This implies that such legislation might not have resulted in significant tax reductions.

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