Honors Thesis Archive

Author	Jonathan Specht
Title	Municipal Taxes and Revenue in Ohio: An Estimation from the Laffer Curve
Department	Economics
Advisors	Steven Landgraf, Gabriel Courey, and Staci Rhine
Year	2020
Honors	University Honors
Full Text	View Thesis (968 KB)
Abstract	This paper explores the relationship between Ohio municipal tax rates and their revenues. Using a panel regression for the years 2013 to 2017, it is estimated where municipal tax rates are along the Laffer curve relative to the revenue-maximizing rate. The evidence from the regressions suggest that there is an inverted-u relationship between municipal tax rates and revenues as predicted by the Laffer curve, and Ohio municipalities are operating well below the revenue-maximizing rate. Further, the degree to which the diminishing effects occur depends on city size and median income. Additionally, in conducting robustness checks upon population and median income, diminishing effects were not found in municipalities with incomes above the median appreciation.