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Essays In Taxation

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ktr35.pdf (4.13 MB)
Permanent Link(s)
https://hdl.handle.net/1813/40962
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Cornell Theses and Dissertations
Author
Rozema, Kyle
Abstract

This dissertation contributes to an understanding of the general equilibrium effects of tax policies. In "Excise Taxes and Retail Outlets: Evidence from Panel Data with Transaction-Level Costs, Prices, and Sales", I investigate the impact of excise taxes on retailer behavior and profits. My empirical analysis employs a unique panel dataset on transaction-level retailer costs, prices, and sales that allows me to conduct the study without any assumptions about market structure. Using convenience stores and cigarette taxes as a case study, I find that retailers respond to each $1 increase in state cigarette taxes by decreasing markup by an average of $0.06 per pack, and witness a decrease in weekly profits from cigarette sales of $90. In "The Effect of Tax Expenditures on Automatic Stabilizers: Methods and Evidence", Hautahi Kingi and I analyze the effect of tax expenditures on automatic stabilizers. We propose a microsimulation strategy which exploits links that we identify between automatic stabilizers, tax expenditures, and effective marginal tax rates. Our strategy improves upon current stabilization measures that suffer from an invalid assumption used to translate automatic stabilization of aggregate tax revenue to consumption. Using the Survey of Consumer Finances from 1988 to 2009, we estimate that the Mortgage Interest Deduction and the Charitable Contributions Deduction decreased, and the Earned Income Tax Credit increased, the stabilizing power of the tax system by an average 0.31%, 0.03%, and 1.42%, respectively. In "Behavioral Responses to Taxation: Cigarette Taxes and Food Stamp TakeUp", Nicolas Ziebarth and I investigate a previously unexplored behavioral response to taxation: whether smokers compensate for higher cigarette taxes by enrolling in food stamps. First, we show theoretically that increases in cigarette taxes can induce food stamp take-up of non-enrolled, eligible smoking households. Then, we study the theoretical predictions empirically by exploiting between and within-household variation in food stamp enrollment from the Current Population Survey as well as data from the Consumer Expenditure Survey. The empirical evidence strongly supports the model predictions. Higher cigarette taxes increase the probability that low-income smoking households take-up food stamps.

Date Issued
2015-08-17
Committee Chair
Frakes,Michael D
Committee Co-Chair
Kenkel,Donald S.
Committee Member
Ziebarth,Nicolas R
Chafetz,Joshua
Bodoh-Creed,Aaron
Degree Discipline
Economics
Degree Name
Ph. D., Economics
Degree Level
Doctor of Philosophy
Type
dissertation or thesis

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