Browsing by Author "Judd, Frederick Alonzo, IV"
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Item The impact of expenditure category exemption on the incidence of a retail sales tax(Montana State University - Bozeman, College of Agriculture, 1987) Judd, Frederick Alonzo, IV; Chairperson, Graduate Committee: Jeffrey T. LaFrance.Questions of equity and concerns over an escalating deficit have forced the Montana State Legislature to seek alternative and/or additional ways to raise revenue. One such proposal to raise revenue is a sales tax. Opposition toward a sales tax is based largely on the feeling that it is a regressive tax, and therefore distributes the burden unfairly. The purpose of this study is to determine the impact of expenditure category exemption on the incidence of a retail sales tax. The overall progressivity/regressivity of a retail sales tax is calculated, both with exemptions and without exemptions from the base of the tax. The model used in this study is an expenditure function that is quadratic in family size and permanent income. Tobit regression analysis is used to derive maximum likelihood estimates for 41 expenditure categories. From these tobit estimates, expenditure shares