Date of Award
Doctor of Philosophy
Donald J. Bruce
Celeste K. Carruthers, Enda P. Hargaden, LeAnn Luna
The first chapter examines the long-run and short-run elasticity of income with respect to changes in tax rates. The Elasticity of Taxable Income (ETI) is a largely-debated parameter in both research and policy. Despite the growing importance of ETI, the literature has not fully considered the intertemporal impacts of taxation. I expand the literature by estimating short-run and long-run impacts of tax rate changes relying on the most recent estimation method and using appropriate lagged values of income when constructing the predicted net-of-tax rate instruments. The short-run ETI in the baseline specification is 0.69 whereas estimates for the Elasticity of Broad Income (EBI) are much smaller and imprecise. The second chapter studies the impact of tax base on the elasticity of income. Most of the existing literature has appropriately used a constant definition of taxable income to focus on the effects of tax rate changes. It is important to recognize that a decrease in the tax base (in the form of a new deduction, exemption, or credit, for example) can create new opportunities for legal tax avoidance without altering real behavior. Using the most recent estimation method, I estimate the impact of tax base on the behavioral responses to taxation. Estimated results for the impact of tax base are much smaller than those in the existing literature. The third chapter examines the possible linkages between school choice and home values. I use home prices to draw inferences about households’ value for school choice, and a Herfindahl-Hirschman Index (HHI) for enrollment among four different types of schools as a proxy measure of school choice. I empirically test two hypotheses: 1) less concentrated counties will have less variability in home prices, 2) less concentrated counties will have higher median home prices. Based on county-level data, I find evidence that an increase in competition for enrollment is associated with a decrease in inequality of home prices within the county. Moreover, I find evidence of an overall increase in home prices within the counties following increased competition for enrollment among schools.
Haque, Md Sabbirul, "Three Essays in Public Finance. " PhD diss., University of Tennessee, 2020.