Assesing the Impact of Local Incentives on Capital Cost: The Case of the Indiana Era Program

<p>Public policy makers and administrators around the world recurrently face the question of whether to grant tax privileges to businesses in order to promote investment, jobs, or economic development in general. This article analyzes a very popular form of local incentive, the property tax abatement, and its ability to reduce capital cost. The research question is: By how much do property tax abatements reduce the capital cost of business and homes? Results show that abatements can account for quite a large range of possible percentage reductions in the price of investment for firms. The findings provide public administrators and policy makers with data and a tool to assess the benefits that firms derive from abatements. This in turn can contribute to more informed abatement decisions and to an overall assessment concerning the suitability of this tool to promote economic development.</p

Advantages and Disadvantages of Exempting Municipal Bonds from the Federal Income Tax: The U.S. Experience

<p>Romania and other Eastern European countries have undergone dramatic reforms as they have sought to democratize political institutions, develop their economies, rely on private markets for the provision of goods and services, and pursue a course of economic integration with Western European nations (Lazar, 2005). Of course, these reforms have included the complete overhaul of tax and revenue systems (Lazar, 2005). As these tax reforms mature and are adapted to the differing realities of each country, it might be useful to reflect on the experiences and mistakes of countries whose tax systems they have used as blueprint for their own reforms. This is the spirit in which this analysis is written. The article presents a synthesis of the American experience with tax-exempt municipal bonds, and the advantages and disadvantages associated with this tax exemption. The exemption represents a subsidy from the federal government to states and local governments, and as such, it has powerful incentives with implications from the economic and redistributive standpoints. This article explains these implications and how they have been addressed in the U.S.</p

Shared Sacrifice? An Inquiry into the Willingness to Perform Compulsory Military Service

The recurring debate over mandatory military service has been revived as the U.S. all-voluntary military force is stretched to its limits in the war on terrorism. With the purpose of shedding light on preferences for compulsory military service, this article presents an inquiry into the characteristics of individuals that are more willing to perform compulsory military service. Using a national data set on high school students, one of the main insights derived from this study is that the characteristics of high school students willing to perform compulsory military service agree substantially with known characteristics of military recruits. In other words, high school students favour compulsory service in the military if they already have a predisposition to enter the military voluntarily. The research shows that the person who may be more willing to perform compulsory military service has the following characteristics: Parent in the military, low socio-economic status, conservative, male, and from the Mountain, Pacific, and Southern regions of the United States. Regional variations in willingness to perform compulsory service appear, in part, to capture regional variations in religiosity