what does remi say? sm pi+ demonstration: evaluating tax and government assistance presented by...
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what does REMI say? sm
PI+ Demonstration: Evaluating Tax and Government Assistance
Presented By Chris BrownAssistant Economist, REMI
what does REMI say? sm
Partial List of Users who Evaluate Tax
• Texas Comptroller• New York City Independent Budget Office • Missouri State Auditor’s Office• New Mexico Legislature • Ohio’s Governor’s Office• Utah's Governor’s Office• Massachusetts Department of Finance
what does REMI say? sm
Stimulus Package
www.recovery.gov
what does REMI say? sm
Balanced Budget Dilemma
• States facing large budget shortfalls due to an unprecedented economic downturn
• Tax increases reduce attractiveness of the state to businesses and individuals
• Reducing government weakens the economy
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Model Flexibility
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Dynamic Properties
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Structured Analysis
REMI Model Linkages (Excluding Economic Geography Linkages)
State and Local Government Spending
Investment
(1) Output(1) Output
Output
Exports
Consumption
Real Disposable Income
(4) Wages, Prices, and Production Costs(4) Wages, Prices, and Production Costs
Employment Opportunity
Housing Price
Wage Rate Composite Wage Rate Production Costs
Composite PricesReal Wage RateConsumer Price
Deflator
(3) Demographic(3) Demographic (2) Labor & Capital (2) Labor & Capital DemandDemand
Optimal Capital Stock
Employment
Labor/Output Ratio
(5) Market Shares(5) Market Shares
Domestic Market Share
International Market Share
Population
ParticipationRate
Migration
Labor Force
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Tax Scenario
• Tax– Sales Tax
• Consumer Price variable
– Income Tax• Personal Taxes
*Tax variables require a change in the revenue generated or lost from a policy change
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Government Spending Scenario
• Government Spending– Government sponsored program will reduce
electricity prices• Electricity (Industrial Sector) Fuel Costs• Electricity (Commercial Sector) Fuel Costs
– Offset program with government spending decrease and compare results
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Model Demonstration
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Conclusion
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