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.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: tax burden; expenditure patterns; expenditure limitations; tax limitations
• Subjects: D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D78 - Positive Analysis of Policy Formulation and Implementation; H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H24 - Personal Income and Other Nonbusiness Taxes and Subsidies; K - Law and Economics > K0 - General > K00 - General

References

D. Orr, "Proposition 13: Tax Reform's Lexington Bridge?" Policy Review, Vol. 6, Fall, 1978, pp. 57-67.

H. Ladd, "An Economic Evaluation of State Limitations on Local Taxing and Spending Powers," National Tax Journal, Vol. 31, March, 1978, pp. 1-18.

P. Shapiro and W.E. Morgan, "The General Revenue Effects of the California Property Tax Limitation Amendment," National Tax Journal, Vol. 31, June, 1978, pp. 119-28.