"The Effect of Online Shopping on Local Public Finance: Implications of the Supreme Court Decision in South Dakata v. Wayfair", presented by David R. Agrawal, assistant professor of economics, Martin School of Public Policy, University of Kentucky.
High Internet penetration puts downward pressure on tax rates as jurisdictions seek to reduce revenue leakage to tax-free sales; but, taxable online sales will put upward pressure on tax rates because the Internet facilitates tax collection. I find that an increase in Internet penetration induces municipalities on the low-state-tax side of state borders to lower their local tax rates by more than municipalities on the high-state-tax side. A one standard deviation increase in Internet penetration in large municipalities lowers local sales taxes by 0.15 percentage points more in low-tax states.
Agrawal received a PhD in economics at the University of Michigan and an MPP at the Goldman School of Public Policy at the University of California, Berkeley. His research focuses on public economics with an emphasis on taxation, fiscal federalism, and fiscal policy in urban and regional contexts.
Sponsored by the Department of Economics Danforth-Lewis Speakers Series.