Economics ETDs

Publication Date

12-1-1971

Abstract

One of the primary objectives of government taxation and expenditure policies is to redistribute current incomes between various groups in the economy in order to achieve an equitable distribution of income. Within the United States income may be redistributed both between families with different levels of income, and between families living in different states. In this study, the effect of the taxation and expenditure policies of the Federal, and New Mexico state and local governments on the level and distribution of income in New Mexico is estimated. The estimates will allow government policymakers to judge the effectiveness of their policy in achieving an equitable distribution of income in New Mexico. Income is redistributed between families living in New Mexico and families living outside New Mexico as a result of government taxation and expenditure, or budget, policies to the extent that the tax burden of families living in New Mexico exceeds or falls short of the expenditure benefits they receive. Similarly, income is redistributed between families with different levels of income to the extent that the tax burden of families at each level exceeds or falls short of the expenditure benefits they receive when total taxes are equal to total expenditures. The procedure therefore is to estimate first the total amount of taxes borne, and total amount of expenditure benefits received by families in New Mexico. These totals are then distributed to income classes on the basis of assumptions made regarding the incidence of each tax and expenditure. The difference between total expenditure benefits received and total tax payments of families in each income class, or the net budget incidence, represents the amount of income redistributed to or from families in that income class. The findings of this study indicate that there is a substantial amount of income redistributed between families living in New Mexico and families living outside New Mexico. Most of this redistribution is a result of the budget policies of the Federal government. Income is also redistributed from higher to lower income families as a result of the budget policies of all levels of government, again, primarily those of the Federal government. Because the conclusions to be drawn from these results must be based on each individual's subjective evaluation of the desirable level and direction of budget attendent income redistribution, no conclusions as such are drawn from the results of the study.

Degree Name

Economics

Level of Degree

Masters

Department Name

Department of Economics

First Committee Member (Chair)

Gerald Joseph Boyle

Second Committee Member

Sanford Cohen

Third Committee Member

Alfred Leroy Parker

Language

English

Document Type

Thesis

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