Social and Behavioral Sciences Commons^™

Are Tax Rates Too Volatile?, Gregory Hess

CMC Faculty Publications and Research

The way in which a government chooses to raise tax revenue over time has attracted considerable attention both in the tax literature, and the political business cycle literature. The tax literature ahs emphasized planning problems where the government chooses taxes and a path for government debt to minimize the excess burden of taxes over time. Alternatively, the political business cycle models focus on the fiscal policies pursued by incumbent governments to either improve their reelection prospects or to constrain the policies that future governments in power will pursue.

This paper addresses the question of whether tax rates fluctuate “in excess” …

The Cost Of Doing A Cost Estimate, Donald S. Remer, Harry R. Buchanan

All HMC Faculty Publications and Research

There are many reasons for cost overruns, but one of the key factors it the lack of resources (time, money, and staffing) spent to do proper up-front cost estimates. Another major reason is that the implements were not involved in the estimating. The purpose of this article is to address the issue of the cost to do a cost estimate [8]. We will report on how others handle this issue and make suggestions on how the Deep Space Network (DSN) should estimate the amount to spend on a cost estimate and its impact on reducing the probability of a cost …

A Test Of The Theory Of Optimal Taxation For The United States, 1869-1989, Gregory Hess

CMC Faculty Publications and Research

A popular theory of optimal tax policies suggests that tax rates should follow a random walk. This paper extends the existing empirical literature in three ways. First, the impact on the marginal utility of consumption when the government chooses a tax plan to smooth the distorting impact of taxes is considered. Second, exogenous changes in the real rate of interest are incorporated into the government's optimal tax plan. Finally, the tax elasticity of output is not constant over time. Allowing for these changes, there is evidence that the government discounts the future, attempts to smooth the distorting impact of taxes …

Nominal Income Targeting With The Monetary Base As Instrument: An Evaluation Of Mccallum's Rule, Gregory Hess, David H. Small, Flint Brayton

CMC Faculty Publications and Research

In this paper, we explore McCallum's monetary base instrument rule in the context of several models. The first section uses two models, previously utilized by McCallum, to demonstrate the general properties of his rule and to update through 1992 the empirical support for the rule. The second section uses models that allow a significant role for interest rates in transmitting the effects of changes in the monetary base to aggregate demand. The analysis in these two sections makes two main points: (1) Shifts. or instabilities, in the structural relationship between the base and nominal GNP in the 1980s and 1990s …