Net fiscal incidence at the regional level: A computable general equilibrium model with voting.

摘要

In this dissertation, net fiscal incidence was investigated at the regional level using a computable general equilibrium model. The advantage of this approach over previous contributions in the literature is that it accounts for the inefficiency of public goods provision and the inability of consumers to maximize utility under median voter rule, the excess burden of taxes, tax exporting and excise tax effects, and consumer surplus effects of variations in the provision of public goods.;Results show that the distribution of net benefits across income groups is significantly affected by the excess burden of taxes, tax exporting and the elasticity of substitution between the public good and private commodities and leisure. Whether the public good is under or over-supplied depends on the assumed value of elasticity of substitution. Assuming that this parameter is equal to the midpoint of empirical estimates, results show that, in Georgia, there is a 30 percent undersupply of the public good. In order to induce the median voter to vote for the optimal amount of the public good, his tax price needs to be reduced by 39 percent. Furthermore, relative to a Lindahl equilibrium, the benchmark net benefit distribution is proportional: in terms of welfare, all income groups lose an average of four percent of their income. On the other hand, relative to an equilibrium with a Lindahl-equivalent tax structure and the benchmark amount of the public good, the distribution of net benefits across income groups in the benchmark is regressive or pro-rich