Open Access. Powered by Scholars. Published by Universities.®

Law Commons

Open Access. Powered by Scholars. Published by Universities.®

Descendants

University of Michigan Law School

2010

Series

Articles 1 - 1 of 1

Full-Text Articles in Law

How Important Are Perpetual Tax Savings?, James R. Hines Jr. Jan 2010

How Important Are Perpetual Tax Savings?, James R. Hines Jr.

Articles

State and local expenditure and tax revenue respond less to the business cycle than do federal spending and revenue, thereby reducing the countercyclicality of total government expenditure and revenue. This paper considers forces responsible for the cyclical pattern of state expenditure and revenue. Annual fluctuations in state personal income are associated with small changes in state spending and significant changes in tax receipts; receipt of federal grants is associated with greater state spending. Tax collections, and to a lesser degree expenditure, of larger states are more closely associated with annual income fluctuations than are the tax collections and expenditure of …