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Many states face challenges in producing accurate forecasts of tax revenue from personal income. Using data from 1996 to 2019, we look at how growth in the various base components… Click to show full abstract
Many states face challenges in producing accurate forecasts of tax revenue from personal income. Using data from 1996 to 2019, we look at how growth in the various base components of personal income influence the accuracy of a state's forecast of revenue from personal income taxation. We consistently find growth in capital gains, which has the highest year-to-year volatility among personal income components, to be associated with a state underestimating its actual revenues from personal income by at least 2 percentage points.
Keywords:
state;
capital gains;
tax;
personal income;
income
Journal Title: Public Finance Review
Year Published: 2023
Link to full text (if available)
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Journal Title: Public Finance Review
Year Published: 2023
Link to full text (if available)
Share on Social Media: Sign Up to like & get
recommendations!