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Local Government Tax Policy: Measuring the Efficiency of New York City's Tax Mix, FYs 1984‐1998
Author(s) -
Berg Janine,
Marlin John Tepper,
Heydarpour Farid
Publication year - 2000
Publication title -
public budgeting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.694
H-Index - 30
eISSN - 1540-5850
pISSN - 0275-1100
DOI - 10.1111/0275-1100.00008
Subject(s) - economics , portfolio , volatility (finance) , ad valorem tax , tax credit , tax revenue , value added tax , tax reform , indirect tax , monetary economics , financial economics , public economics
This article applies the Markowitz portfolio model to New York City's tax mix to determine whether it is ‘mix‐efficient,’ in the sense that the portfolio minimizes volatility for given levels of growth. The results indicate that New York City's tax‐revenue portfolio is very close to being mix‐efficient. The analysis also extends the Markowitz portfolio model to consider the impact on growth and volatility of adopting a tax‐equity constraint.