David Joulfaian

Charitable contributions and intergenerational transfers

Abstract This paper investigates the effects of bequest taxes and the income of children on the lifetime charitable contributions of parents. Using matched income tax records for parents and children, the results show a positive elasticity of 0.6 for contributions with respect to the tax price of bequests. The paper also finds that the income of children affects the amount that parents contribute to charity. The results show a positive elasticity of up to 0.14 for contributions by parents with respect to the income of children, implying that when children are better off, parents are likely to increase charitable giving.

Federal govemment expenditures and revenues in the early years of the American republic: Evidence from 1792 to 1860

Abstract This paper examines the relationship between taxes and spending during the early years of the American Republic. Federal government expenditures and revenues are studied from 1792 to 1860 using cointegration tests and error correction models. Revenues and expenditures are shown to be cointegrated for the historical period. In addition, the error correction models yield results supporting the spend-and-tax hypothesis in the short run, according to which higher spending brings about higher taxes. There is also evidence of feedback between spending and revenues in the long run.

The determinants of off-budget activity of state and local governments

ConclusionThe primary finding of this paper is that the off-budget activity of the public sector is significantly and positively related to on-budget activity by state and local governments. We suggest the following policy implications. One, there appears to be evidence that the composition of total government activity is related to the relative costs of the alternative avenues of providing governmental activity. Future research into determining the nature of the relative cost differences may be one useful means of understanding both the composition of government activity as well as its total size. Two, our ability to measure the “true” size of public sector participation in the economy must go well beyond our attempt here. While we have presented information on one of the important “hidden” elements of public sector participation, we are still a long way from effectively incorporating similar data on legislation, regulations and so forth into our empirical tests. Further research into these issues is clearly warranted.

Dynamics of Government revenues and expenditures in industrial economies

The sources of growth in government revenues and expenditures in 22 OECD countries is addressed. The question of whether the revenue constraint is binding on the growth of government expenditures, or whether the ‘displacement’ effect of expenditure growth is binding is considered. Controls for the effects of the output gap and inflation rate on government revenues and expenditures in each of the 22 countries are presented. A major conclusion is that reductions in spending are essential to reducing budget deficits and controlling government size.

Inheritance and Saving

This paper explores the effects of inheritances on the saving of recipients. Information on inheritances and heirs is obtained from estate tax records of decedents which are linked to the income tax records of beneficiaries. The observed pattern of wealth mobility within two years of the receipt of inheritances and multivariate analyses show that wealth increases by less than the full amount of the inheritance received. Similarly, and consistent with previous findings, large inheritances are found to depress labor force participation.

Taxes and Corporate Giving to Charity

An extensive body of the literature has examined the determinants of individual giving to charity. Indeed, the role of the personal income tax continues to attract considerable attention. In contrast, very few have explored the effects of taxes on corporate giving. This article represents an attempt to fill this void. It employs a large sample of corporate tax returns and finds that taxes are an important consideration in corporate giving.

Centralization and Government Competition

This paper examines the relationship between government size and fiscal centralization with specific focus on the separate influences of centralism and fragmentation on the size of public sector in the United States. The empirical findings at the national level provide support to the hypothesis that fiscal decentralization leads to a smaller government. The findings at the state and local levels, however, show no empirical relationship between government size and the degree of centralization.

The Relationship Between On-Budget and Off-Budget Government

Abstract This paper studies the hypothesis that controls on on-budget government spending leads to greater off-budget activity. Existence of a substitution effect suggests that our ability to control and measure the size of government is more difficult than previously thought.

The Government Revenue-Expenditure Nexus: Evidence from a State

In this article, we empirically gauge the government revenue-expenditure nexus for a state. Employing Granger-causality and vector autoregression techniques, our stylized results indicate that state revenues cause state expenditures. Furthermore, we find that federal grants are not a significant perma nent source of exogenous shock.

Income Mobility: The Recent American Experience

This paper examines the pattern of income mobility during the 1980s and the mid 1990s. It employs a panel of individual income tax returns for the years 1979 through 1995 to study this pattern, and explore whether income mobility has increased during the period. We focus on working age Americans, those age 30 and over in 1979, the first year of the panel, and up to age 61 in 1995, the last year of the panel. Consistent with other research, we find evidence of considerable mobility. For example, more than one-half of those in the bottom quintile move to a higher quintile over the period.