I am setting up a model to estimate the impact of higher taxes on wealthy individuals within a state. I have estimates of the tax revenues that will be generated and was going to model this as a reduction in household income for those with incomes above $200k (which is the group that will be taxed). If the tax revenues generated go to local education and/or local government, is it better to use industry change or industry spending pattern? When I run the numbers it appears that the high-level results (employment, output, etc.) are the same but the mix of direct/indirect/induced changes. What is the difference in these two activity types and which would be better for this application? In another scenario, I want to estimate the impact of some of the higher tax revenues going towards a lowering of local property taxes (in the event that municipalities pass through the higher revenues into lower property taxes). What would be the best way to model this? Thank you for your insights.
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