Tax Reforms With the Oklahoma Tax Model

Abstract

This article evaluates the ex ante forecasting performance of the Oklahoma tax model It is compared with that of the model-free Box-Jenkins methods. The Oklahoma model outperforms the Box-Jenkins methods in forecastings of various tax revenues. The model is also simulated to see the tax reforms and tax revenues both in a short-run and in a long-run. The model concludes that the effective way to collect the tax revenues for Oklahoma is through a tax reform on state income tax followed by the corporation income tax, general sales tax, and motor fuel tax.