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Tax Structure And Political Support: Equity-Related Goods Taxation., Jonathan Mckernan

Masters Theses

We focus this paper on a political economic question, What determines the U.S. states’ sales tax treatment of equity-related goods? We consider a good to be “equity related” when its consumption is essential to survival. States sometimes choose to tax these goods uniquely, often exempting them from the sales tax base. The equity-related goods for this paper are food, clothing, water, electricity, household fuel, and natural gas. All these goods are for home consumption. This question is relevant to the larger issue of how tax structure evolves or is determined. We test the theoretical explanation of tax structure determination that …