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Local Option Sales Taxes and Fiscal Disparity: The Case of Georgia Counties
Author(s) -
ZHAO ZHIRONG JERRY,
HOU YILIN
Publication year - 2008
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/j.1540-5850.2008.00896.x
Subject(s) - revenue , equity (law) , economics , distribution (mathematics) , conceptualization , inequality , sales tax , finance , monetary economics , public economics , tax reform , ad valorem tax , political science , mathematical analysis , mathematics , artificial intelligence , computer science , law
While local option sales taxes (LOST) have become an important revenue source for local governments, there has been concern about the distribution of LOST revenues: the uneven distribution of sales tax bases may have introduced a new source of fiscal inequality and exacerbated existing fiscal disparity. Using Georgia county data ( N =159, 1970–2000), this study examines whether and how LOST have affected local fiscal disparity. Our findings suggest that the effects of LOST on fiscal disparity vary with the approach to measure revenue‐raising capacity; thus the issue of LOST distribution is sensitive to the underlying conceptualization of “fiscal equity.”