Tax Impacts

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15 comments

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    jenny
    Hi Timothy, There was an issue with the 2009 tax data that was resolved in December 2010, so if you purchased your 2009 data prior to December and have not re-downloaded the revised data, that may explain the differences. Also, it is always good to check to make sure that your direct effects are the same between the two models. Otherwise, your reasoning is probably correct.
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    yellowdot62
    Jenny, I just purchased the 2009 data. The direct effects are very close. See the attached spreadsheet. The tax impacts, especially for property taxes, seem very odd. The 2008 impacts seem reasonable but those based upon the 2009 seem out of line. Tim
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    DougO
    Tim can you zip up the 2009 model and e-mail it to info@implan.com so I can see the region and import you impact vector to try out?
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    yellowdot62
    you bet, the model is on its way
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    yellowdot62
    Doug, Thank you for sending me the correct Pennsylvania file. It cost me about 2 days of work but no rest for the weary. I have two quick questions: 1.) I'm modeling lease and bonus payments for natural gas leases as an injection of household income (I think for incomes less than 15k). In Pennsylvania lease and bonus payments are not subject to local earned income taxes. Since it appears that IMPLAN would have no way of knowing this, or at least the way I'm tricking the model, it seems I should reduce state and local by taxes by the rate x stimulus? IMPAN estimates $182 million in additional household income taxes and I think the rate for earned income local taxes is 1% so this would reduce the impact by $10 million assuming a billion dollars in stimulus. Does this seem reasonable? 2.) I'm proposing to study how the production and shipment of Powder River Basin coal affects Wyoming and regional economies. I noted your paper with Lindall on multi-regional trade flows using IMPLAN. It seems that the main contribution is spatial information on trade patterns. Unlike the commodities you discussed in your examples, the Energy Information Administration has detailed information on coal shipments around the country. I liked the maps in the paper. PRB coal is used to produce about 40% of the nations electric power. Would it be possible to generate a map of PRB electricity to households and businesses around the nation? Also, can one do more than map trade flows and estimate regional economic impacts? I'm thinking in particular the economic stimulus from railroads. Any comments or suggestions would be most appreciated.
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    yellowdot62
    Doug, I'm also modeling the impacts of lower natural gas prices on the Pennsylvania economy. I have econometric models that estimate the changes in natural gas and electricity expenditures by the residential, commercial, and industrial sectors. I am thinking of modeling the impact of lower residential energy expenditures as an increase in household income, either for households <10k, or introduce the change as an institutional spending shock. What are the pros and cons of each? Could the reduction in commercial and industrial sector expenditures be modeling as an institutional spending change or is if preferred to estimate output changes and enter them as industry changes by sector? Thank you again, Tim Considine
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    DougO
    Modeling change in household disposable income through the household spending pattern is a commonly used technique that we have encouraged. Industrial and commercial changes in income is much trickier as Input-Output treats corporate profits as a leakage as residence of the owners of the stock is unknown, and how much of the profits are retained, dividended or re-invested (and where) is not normally known. A more important might be expansion or attracting of new business (ie a change in outputs)to the cheaper power rates. We do not have a general technique to help with this that is satisfactory.
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    DougO
    For the previous post: 1) Yes, the entire amount is disposable income. To model this import the household class as a institution spending pattern (Setup Activity>Activity Options>Import>Institution Spending Pattern). The software will "spend" the entire activity level with no taxes or savings removed. 2) The trade patterns allow the software to a) estimate local use of locally produced goods which affects the resulting multipliers and b) estimate movement between regions modeled in an MRIO analysis to capture those movements in the multiplier effect. The trade flows would not be identifiable to a specific company, you would essentially need to know what proportion of the power generated in each region is fed by PRB coal and the destinations of that energy would use the appropriate proportions. Trade flow data can be purchased for that kind of mapping (i believe it is 1/4th the cost of the IMPLAN data sets). You can call for the exact pricing.
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    yellowdot62
    Doug, As you may recall, I am modeling lease and bonus payments as the household class as a institution spending pattern (Setup Activity>Activity Options>Import>Institution Spending Pattern). The software will "spend" the entire activity level with no taxes or savings removed. My question concerns IMPLANs estimate of property tax revenues. Are assessed property values unaffected by lease/bonus/royalty payments that landholders receive, and thus the property tax numbers generated by IMPLAN reflect the model's assumptions regarding how landowners spend their lease/bonus/royalty payment? Thank you again for your assistance. Sincerely, Tim
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    jenny
    The SAM is static and represents the picture of the study area economy in the particular year of your data - thus, it does not adjust tax rates, spending rates, etc. in response to an infusion of income. So the answer to your question is Yes. A few other things to note about the tax impact report: Property taxes listed in the Household column is only for personal property such as autos and boats, and is not real estate. Real estate taxes show up in the IBT column of the tax impact report - homeowners pay the taxes to the owner-occupied dwellings sector and renters pay the taxes to the real estate sector. Those two sectors then transfer the payments to the government via IBT. The tax impact report splits the IBT tax impacts into the various categories based on the picture of that region's economy. We do not have industry-specific taxes paid (other than total IBT, which is industry-specific), so the distribution will be an all industry average.
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    BKinsey
    Hello! I am having some confusion about what types of taxes are included in two of the rows that appear in the IMPLAN tax report: * "IBT: Property Tax"; and * "IBT: Other Taxes". My questions: (1) I see from the earlier post that HOUSEHOLD real estate taxes show up in the IBT column of the tax impact report. Would these houshold real esate taxes show up in the "IBT: Property Tax" row? Or are they in "IBT: Other Taxes"? (2) Are the real estate taxes paid by BUSINESSES included in the "IBT: Property Tax" row? (3) Do property taxes paid by BUSINESSES (e.g., value of equipment) show up in the "IBT: Property Tax" row? Thank you, in advance, for any insight that you can provide! ~ Billy
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    jenny
    Hi Billy, 1. Household real estate taxes show up in the IBT column, Property Tax row. 2. Yes 3. Yes
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    BKinsey
    Hi Jenny - Thank you. This helps a lot. Is there a way that I can separate the components of "IBT: Property Taxes" row that is generated in the IMPLAN tax report? I am particularly interested in pulling out the HOUSEHOLD real estate taxes, so that I can focus on the taxes being paid by businesses. I'd also like to separate Business real estate taxes from Business property taxes, but I suspect that isn't possible. I really appreciate your help! ~ Billy
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    jenny
    Hi Billy, Unfortunately, we do not have that kind of detail. We suggest going to your state revenue office - they will likely be able to provide you with this information.
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    BKinsey
    I understand and will take your suggestion. Thank you very much!
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