Local Option Sales Taxes and Fiscal Disparity: The Case of Georgia Counties

19 Pages Posted: 18 Feb 2008

See all articles by Zhirong Jerry Zhao

Zhirong Jerry Zhao

University of Minnesota - Twin Cities - Hubert H. Humphrey Institute of Public Affairs

Yilin Hou

Maxwell School, Syracuse University

Abstract

While local option sales taxes (LOST) have become an important revenue source for local governments, there has been concern about the distribution of LOST revenues: the uneven distribution of sales tax bases may have introduced a new source of fiscal inequality and exacerbated existing fiscal disparity. Using Georgia county data (N=159, 1970-2000), this study examines whether and how LOST have affected local fiscal disparity. Our findings suggest that the effects of LOST on fiscal disparity vary with the approach to measure revenue-raising capacity; thus the issue of LOST distribution is sensitive to the underlying conceptualization of fiscal equity.

Suggested Citation

Zhao, Zhirong Jerry and Hou, Yilin, Local Option Sales Taxes and Fiscal Disparity: The Case of Georgia Counties. Public Budgeting & Finance, Vol. 28, Issue 1, pp. 39-57, Spring 2008, Available at SSRN: https://ssrn.com/abstract=1094156 or http://dx.doi.org/10.1111/j.1540-5850.2008.00896.x

Zhirong Jerry Zhao (Contact Author)

University of Minnesota - Twin Cities - Hubert H. Humphrey Institute of Public Affairs ( email )

301 19th Ave S
Minneapolis, MN 55455
United States

Yilin Hou

Maxwell School, Syracuse University ( email )

426 Eggers Hall
Syracuse, NY 13244-1020
United States
315-443-3114 (Phone)

HOME PAGE: http://www.maxwell.syr.edu/pa/cpr/Hou,_Yilin/

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