Taxation

Academic Journal Publications:

The Determinants of the Severity of State Fiscal Crises by Dr. David T Mitchell and Dean Stansel

Mitchell, D. T. and Stansel, D. (2016), The Determinants of the Severity of State Fiscal Crises. Public Budgeting & Finance. doi: 10.1111/pbaf.121160

During the most recent recession, many state governments faced substantial budget shortfalls. Those shortfalls are often blamed on external factors like the declining economy or reductions in federal aid. What politicians themselves do, especially during expansionary years—whether they enact spending increases, implement tax cuts, increase the size of their rainy day funds, or some combination thereof—is typically given less attention. We examine those factors and find that fiscal stress tends to be positively associated with spending growth, negatively associated with the size of rainy day funds, and not statistically significantly associated with the unemployment rate or federal aid.

ACRE Working Papers:

State Taxes and Manufacturing Productivity – An Arkansas Case Study by ACRE Policy Analyst Jacob Bundrick

From 2002 through 2012, Arkansas saw less growth in the dollar value of manufacturing, a greater decline in manufacturing’s share of gross domestic product, and a faster rate of job loss in manufacturing compared with its surrounding states. One reason for these outcomes is manufacturing’s slow growth in labor productivity, which is defined as growth in the dollar value of output per manufacturing employee. This study examines the degree to which state and local tax burdens influence worker productivity. Its analysis uses a between estimator on a fifty-state panel data set for the years 2002, 2007, and 2012. This paper finds that total state and local tax burdens hurt manufacturing labor productivity, with state and local sales and corporate income taxes primarily driving the loss in productivity. Legislators should consider the damaging effects that these taxes have on labor productivity when making policy decisions.

Policy Reviews:

Tax Breaks & Subsides: Challenging the Arkansas Status Quo by Policy Analyst Jacob Bundrick

Have you ever wondered whether tax breaks and subsidies have side effects? Are you curious about alternative ways to grow Arkansas’s economy? This policy review give an in-depth look at these programs, their economic impact, and some common misconceptions people have about them.

Policy Briefs:

Economic Development or Risky Business: A Citizen’s Guide to Issue 3, 2016 by ACRE Scholar Dr. Jeremy Horpedahl and Policy Analyst Jacob Bundrick

This brief guide gives readers the pros and cons of the controversial ballot measure Issue 3: An Amendment to the Arkansas Constitution Concerning Job Creation, Job Expansion and Economic Development. This ballot issue would remove the current cap on Amendment 82 bonds the state may issue for economic development projects and allow local governments to appropriate money for economic development. Proponents of Issue 3 argue that by removing the limit on the amount of debt the state can issue for economic development, Arkansas may be able to attract economic-development projects it would not otherwise be able to secure. However, issuing debt and using tax dollars for economic development comes at a cost. Arkansas and its cities would take on significant risk by issuing public debt to attract select companies under the change from Issue 3.

Radio:

  • ACRE Director Dr. David Mitchell and Policy Analyst Jacob Bundrick spoke in a 2 hour segment on the 96.5 FM Dave Elswick Show discussing Arkansas taxation, subsidies, and other state issues on July 13, 2017.
  • Policy analyst Jacob Bundrick was a guest on Josh Waters 101.3 FM on July 6, 2017 to discuss policy issues in the state.
  • ACRE Director Dr. David Mitchell, Scholar Dr. Jeremy Horpedahl, and Policy Analyst Jacob Bundrick were guests on Newsradio 102.9 KARN on May 1, 2017 where they discussed Arkansas tax reform and other state issues.
  • ACRE Director Dr. David Mitchell and ACRE Scholar Jeremy Horpedahl were guests on the Paul Harrell Program on January 4, 2017. They discussed the complexity of Arkansas’s tax system and possibilities for tax reform.
  • On December 28, 2016, ACRE policy analyst Jacob Bundrick and ACRE Scholar Jeremy Horpedahl were on Newsradio 102.9 KARN discussing tax reform in Arkansas.

Op-eds/Commentary:

  • Risky Proposition op-ed published October 22, 2016 by ACRE policy analyst Jacob Bundrick in the Arkansas Democrat-Gazette.
  • Policy analyst Jacob Bundrick’s recent blog post on tax breaks and subsides in Arkansas was recently cited in a Letter to the Editor by Mr. Dane Clark of Fort Smith in the Lonoke Democrat. Clark’s letter was circulated in several local Arkansas papers like the The Helena Arkansas Daily World, the Fort Smith Times Record, and the Arkansas News Bureau. This blog post was based on Bundrick’s recent policy review, Tax Breaks and Subsidies: Challenging the Arkansas Status Quo.
  • Film Incentives Benefit Out-of-Staters op-ed published October 10, 2016 by ACRE policy analyst Jacob Bundrick and Rajshree Agarwal, the director of the Ed Snider Center for Enterprise and Markets at the University of Maryland’s Robert H. Smith School of Business in The Baltimore Sun. 
  • It’s broken? Fix it. op-ed published February 6, 2016 by ACRE Policy Analyst Jacob Bundrick. Arkansas Democrat Gazette and Arkansas Online.
  • Better Use of Fund op-ed published December 21, 2015 by ACRE Policy Analyst Jacob Bundrick. Arkansas Democrat Gazette and Arkansas Online.

Blog Posts:

Why Financial Incentives for Businesses Put Taxpayers at Risk posted on The ACRE Review September 13, 2016

How Governments Use Financial Incentives to Try to Steer the Economy posted on The ACRE Review September 6, 2016

How Tax Breaks and Subsidies Cost You and the Government Money posted on The ACRE Review August 30, 2016

Why Financial Incentives Do Not Increase Economic Activity posted on The ACRE Review August 23, 2016

Tax Incentives and Subsides: Two Staples of Economic Development posted on The ACRE Review August 19, 2016

State Incentives in Arkansas: A Friendly Debate in the Arkansas Democrat-Gazette posted on The ACRE Review April 29, 2016

Making Cents of $18 Million posted on The ACRE Review February 29, 2016

Taxes Take their Toll on Arkansas Manufacturing posted on The ACRE Review July 10, 2015