The distribution of burdens and benefits of government fiscal policy: an empirical study of the Western Region

Published in 1975

Government taxation and expenditure policies provide one important means by which the public sector can influence income distribution. Little empirical analysis has been conducted to determine the net effect of public fiscal policies upon income distribution because of the in ability to objectively determine the value to families of government provided public goods. It is the objective of this study to estimate the net impact, considering both taxes and expenditures, of government fiscal activity in the Western Region of the United States in 1961. Recent theoretical advances allow the value of public goods expenditures by government to be determined. The distributions of the tax burdens, expenditure benefits, and post-fiscal incomes are determined for the Western Region and for the urban and rural populations of the region. These distributions are then compared with the results of an earlier study done for the entire United States which used the same data sources and methodology. Public fiscal policies made income distributions more equal in the West in 1961, except for the rural farm population. There was also a net transfer of income into the region as a result of the fiscal policies, with most of the transfer accruing to the rural population.

AZU_TD_BOX287_E9791_1975_216.pdf (4.25 MB)

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