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1976 Memorandum on the Allocation of the Federal Tax Burden by Standard Metropolitan Statistical Area (SMSA) 1 (1976)

handle is hein.tera/malfthouts0006 and id is 1 raw text is: MEMORANDUM ON THE ALLOCATION OF
THE FEDERAL TAX BURDEN BY STANDARD METROPOLITAN
STATISTICAL AREA (SMSA)
Fiscal Year 1976
This memorandum presents estimates of the Federal tax burdens
borne by the residents of the nation's metropolitan areas, (as defined by
the Office of Management and Budget through December 31, 1976). For New
England metropolitan areas, where towns rather than counties are. the com-
ponents of SMSA's, estimates are shown for the equivalent New England County
Metropolitan Area (NECMA). Since the states of Vermont and Wyoming have no
officially designated SMSA's, estimates of Federal tax burdens for Chittenden
County, Vermont and Laramie County, Wyoming are included. The 261 metro-
politan areas included in this study account for approximately 78 percent of
the Personal Income and 73 percent of the population of the entire nation.
The estimates presented here are somewhat comparable to the state estimates
which the Tax Foundation has prepared for many years; estimates of the dis-
tribution of the Federal tax burden by state for fiscal year 1978 are avail-
able in Tax Foundation's Memorandum on the Allocation of the Federal Tax
Burden and Federal Grants-in-Aid by State, Fiscal Year 1978, April 1978.
Since tax collections data published by official government agencies
are not designed to reflect the geographical origin of Federal taxes, in terms
of the ultimate incidence or burden, special estimating techniques are required
to ascertain the taxes actually borne by the residents of each state or SMSA,
as distinct from the places where the tax payments are initially made. For
example, Treasury Department figures show that the bulk of Federal excise taxes
on tobacco and tobacco products are collected in the few major tobacco-produc-
ing states, while the burden of these taxes rests on consumers of tobacco pro-
ducts in all areas.
The bases used by the Tax Foundation for estimating the tax burden in
SMSA's, together with the amounts of tax collected in 1976, appear in Table 1.
Estimates of the Federal tax burden, both total and per capita, appear in
Table 2, which also shows the percentage of the total Federal tax burden falling
on the residents in each of the 261 SMSA's. The total tax burden is consist-
ent with the official unified Federal budget concept introduced with the 1969
Budget presentation. The tax burden estimates are for fiscal year 1976, the
latest for which applicable base data are available. In that year per capita
Federal taxes for the nation as a whole averaged $1,343 ($1,444 in the 261
SMSA's covered here.) In fiscal year 1978 per capita Federal taxes nation-
wide are estimated at $1,784, about 33 percent higher than in 1976. Therefore,
on the average, the per capita tax burdens shown in Table 2 should be increased
accordingly to obtain an estimate of current burdens.
Some of the questions which allocation estimates help to answer are
these:
(1) Do particular types of Federal taxes tend to impose a greater
burden in some areas than in others? In other words, does one
pattern of Federal taxation force the people of some areas to
pay a greater proportionate share than would be the case under
a different tax structure?

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