This dissertation comprises two essays in the field of public finance and urban development. The first essay, 'Interdependence among Municipality, Firms and Households', tackles a contentious issue in local taxation and urban development--whether business development increases the residential tax burden. The second essay, 'Does Tax Competition Exist at the Municipality Level?', examines existence of tax competition at the municipality level Community planners and development officials tend to believe that business development would lower residential property tax burdens by drawing taxes from nonresident business owners. However, these beliefs have recently been challenged by some urban planners and other analysts of the suburban growth process. The first essay provides the first effort to assess relations between residential property tax rate and urban development in a simultaneous framework. It examines not only the impact of business and residential development on the residential tax burden, but also the effect of local fiscal decisions on the intra-metropolitan location of firms and households. Using the data collected from suburb Chicago, business development, especially manufacturing projects, is found decreasing the residential property tax burden while taxes are found detrimental to business development. The diagnostic testing results confirm that taxes, firm and household location decisions are simultaneously determined. That is, empirical studies without modeling them simultaneously would generate biased results It has long been recognized that local governments engage in fiscal competition either for resource or for political support. However, while we observe many cases of fiscal competition, we also notice that some seemingly highly-profit development projects are rejected by locals due to environment concerns. So far, few empirical efforts have been made to address the issue of fiscal competition and none of these studies used the data collected at the municipality level. Using the significance of Moran's I spatial autocorrelation coefficient as an indication of tax competition, the second essay examines property tax rate increases over last 10 years in 109 Chicago suburban municipalities. We find that, although tax rate movements among neighboring communities do cluster, the sources of the observed clustering are not physical proximity. That is, tax competition does not exist / acase@tulane.edu
| Identifer | oai:union.ndltd.org:TULANE/oai:http://digitallibrary.tulane.edu/:tulane_24462 |
| Date | January 1996 |
| Contributors | Chen, Xiao (Author), Oakland, William H (Thesis advisor) |
| Publisher | Tulane University |
| Source Sets | Tulane University |
| Language | English |
| Detected Language | English |
| Rights | Access requires a license to the Dissertations and Theses (ProQuest) database., Copyright is in accordance with U.S. Copyright law |
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