Tax Rates and Tax Revenues: The Other Influencers of Revenue and Their Relationship to Behavior

Publication Date

2025

Presentation Length

15 minutes

College

College of Liberal Arts & Social Sciences

Department

Political Science, Department of

Student Level

Undergraduate

SPARK Category

Research

Faculty Advisor

Nathan Griffith

Presentation Type

Talk/Oral

Summary

How can it be that in the face of tax cuts, government may enjoy increased revenue and tax increases may create a decline in revenue? This is exactly the phenomenon that took place with the Tax Cuts and Jobs Act of 2017 which saw an immediate spike in revenue upon its enactment. While the literature review points out that factors like GDP, wages, and employment are all correlated with tax revenue, and while these factors were increasing during the time of the enactment, that does not necessarily prove that these economic factors were able to do more than makeup for the difference. Therefore, I will be performing a Longitudinal study from the beginning of the Carter Administration to the end of the Trump Administration and looking at other periods of tax increases followed by a decline in revenue and vice versa. I will also be taking account of the previously mentioned independent variables like inflation, GPD, and employment to see how they may factor into these changes in revenue. It is expected that in the face of high taxes, cuts will cause revenue to increase. This increase in revenue may take place because of a combination of increases in employment, GDP, wages, etc.

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