PREFERENCES FOR STATE TAX AND SPENDING POLICIES: EVIDENCE FROM SURVEY DATA ON THE ROLE OF INCOME

Judy A. Temple, Susan Porter‐Hudak

    Research output: Contribution to journalArticlepeer-review

    2 Scopus citations

    Abstract

    Employing a commonly‐used method of creating a continuous income variable from categorical data, we obtain results from a fiscal survey that reveal a strong nonmonotonic effect of income on the willingness to pay additional taxes for state expenditures on education and public aid. The existence of income‐demand schedules that are U‐ or inverted U‐shaped casts doubt on the appropriateness of assuming that the median income voter is decisive. After investigating the sensitivity of our results to different income measures, we suggest that fiscal surveys should be designed to provide sufficiently detailed information about respondents’incomes, especially for high‐income respondents.

    Original languageEnglish (US)
    Pages (from-to)43-58
    Number of pages16
    JournalEconomics & Politics
    Volume7
    Issue number1
    DOIs
    StatePublished - Mar 1995

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