Studies of tax incidence usually present estimates based on annual data and then simply note that estimates based on lifetime information would be preferable but are precluded by data limitations. This article presents estimates of property tax incidence in both an annual and a life-cycle framework. Under various shifting assumptions, the property tax appears less regressive in a lifetime sense than an annual one. It also appears that transitory influences on measured income may be more important than life-cycle issues in causing annual and lifetime tax incidence profiles to differ .

Sales taxes paid by businesses are buried in production costs and therefore hidden from consumers and policymakers. Final (tax included) prices are related to the number of taxable transactions that the good has undergone and who bears the tax as well as to resource costs. Thus the total sales tax embedded in final prices is obscured. This study investigates the level and the incidence of sales taxes applied to business transactions. An input-output model assuming a full pass forward of the tax is employed. The embedded sales tax is more regressive than the direct share paid by consumers and is found in most commodities including those exempted by legislation.

The ratchet theory of government growth hypothesizes that temporary crises cause government spending to rise and to remain permanently higher than if the crises had not occurred. An examination of federal government spending in the United States since 1800 reveals apparent ratchets associated with the Great Depression, the two world wars, and the Civil War. After taking account of war-related spending and serial correlation in the data, however, only the World War I and Great Depression ratchets can be clearly identified, and they are closely associated with a major change in the underlying growth rate of government spending early in the 20th century. This casts doubt on the ratchet theory of government growth and instead raises the question of why the trend growth rate of government was so much greater in the 20th century than in the 19th.

Massachusetts uses an aid formula that accounts for differences among local communities in both fiscal resources and costs. To assess the success of this aid program in reducing fiscal disparities, it is necessary to estimate the costs of providing public services. Implementing these estimates introduces difficulties arising from the presence of Massachusetts' property tax limitation, Proposition 2½. Our solution is to estimate local government expenditure equations using separate, selection-corrected regressions for communities proposing property tax overrides and those not proposing overrides. This approach produces reasonable results that suggest that the distribution of aid does serve to diminish fiscal disparities.

This article explores the revenue potential of user charges in financing municipal governments in the next decade. Noting that some municipalities charge fees that cover a large percentage of costs, it is reasoned that others could do likewise. This approach suggests a potential for increases in user charges of up to 400% for some services. An alternative approach based on an analysis of marginal costs and externalities suggests that overall revenue increases potentially available from user charges are quite substantial. User charge reliance could increase from the current level of .259 to as much as .848. This is not a prediction that user charges will become this important in municipal finance. However, the analysis does suggest that the past trend toward user charge finance has substantial room to continue.

The article is concerned with how to choose an appropriate summary measure of tax progressivity. Knowing the relevant properties of a global index is important because the answer one gets is, in general, dependent on the choice of an index. Some properties of summary measures are proposed and their consequences are investigated. The starting point of the analysis is a local measure, namely, the residual income progression. For a given distribution of before-tax income, the global indices that are suggested assess the average progressivity, that is, the average degree of progression. The characterization of two families of progressivity indices are presented. Furthermore, one index, the geometric mean of the local measures of progressivity, is proposed and characterized. It possesses attractive properties. Finally, distributional considerations (i.e., distributional weights) are taken into account.

This article examines the labor supply response to a change in the income tax rate when tax revenues finance the provision of government goods. It first shows that even if taxpayers value government goods directly as equivalent income, there will still exist an income effect. It then discusses the nature of the "income effect" and the issues of complementarity and substitutability that arise when government goods are not valued as equivalent income. Finally, it proves that there is no income effect associated with a cut in the income tax rate if and only if preferences are weakly separable between private and government goods and linear in nonleisure private goods.

This article presents a methodology for analyzing public expenditure growth to test for structural change. It subjects a version of Peacock and Wiseman's displacement hypothesis to a test based on the idea that the hypothesis involves a structural break. The method is based on a conventional model of the determination of government expenditures as applied to the United States for the period 1929 to 1981. First, the authors fit the equation for 1929 to 1981 (the entire period), for 1929 to 1945 (the early period), and for 1946 to 1981 (the later period). Second, they employ a test of structural stability between the early and later periods. Because this test is signifi cant, the authors then re-estimate the model for the entire period using an intercept shift dummy and coefficient shift dummies, one for each independent variable, for the later period Because the result is ambiguous, the authors take the fourth step and use the early period regression model to first forecast later period values of the dependent variable and then regress the actual values on those forecasted. The results of this exercise point unambiguously to net downward displacement. The authors also use the later period regression to forecast (or "backcast") early period values and again regress actual values on the forecasted ones. This analysis provides no evidence of either upward or downward displacement. They conclude that if a structural break did occur at the time of World War II, it took a form inconsistent with the displacement hypothesis of Peacock and Wiseman.

This article tests the hypothesis that removing the reelection constraint on congres-sional representatives will alter their voting behavior. This article uses 1977 and 1978 congressional voting records to determine residuals that are taken as a proxy for shirking. The contribution of this article is to test the hypothesis by implementing timing variables to indicate when the decision to retire occurs. Despite many different tests of the hypothesis, there is no evidence that removing the reelection constraint actually causes a change in representatives' voting behavior when they do vote.