Brief Supplement to: Effects of a Federal Value-Added Tax on State and Local Government Budgets
James R. Nunns, Eric Toder
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In this supplement, we examine the short-run effects on state and local budgets of a federal VAT with either a narrow or comprehensive base under the assumptions that the consumer price level increases by the full amount of the VAT and that the level of consumer prices does not change. The estimated short-run effects on the PCE if the consumer price level rises are the same as those estimated for long-run effects, as discussed in Section III of the paper.
Research Areas Taxes and budgets
Tags State and local tax issues