ABSTRACT
Policymakers were surprised to find increases in sales tax revenues in 2020 due to expectations that they would drop 8-20%. We investigate this puzzle and provide novel insights into consumption taxes based on this experience. Using a case study from the State of Utah, we document that shifts in the structure of consumption played a significant role in the robustness of sales tax revenue. Two factors stand out in our results. The first factor is the structure of the tax base for sales taxes in the USA. This tax base covers only a subset of personal consumption, excluding, for example, many services. During the pandemic, when services were restricted or shut down, this caused a shift in spending toward goods that are more likely to be in the sales tax base. The second factor is the boom in e-commerce during the pandemic, which boosted sales tax collections. This was catalyzed by recent legal changes that made the collection of sales taxes in e-commerce easier. Interestingly, this e-commerce boost also shifted the point of sale and related sales tax revenues away from urban areas toward suburban areas. Our case study of the pandemic's effect on sales taxes in the USA generally, and Utah's experience specifically, provides lessons for consumption taxes, such as the VAT more broadly, and lessons on the role of consumption taxes for tax revenue volatility.
ABSTRACT
Policymakers were surprised to find increases in sales tax revenues in 2020 due to expectations that they would drop 8–20%. We investigate this puzzle and provide novel insights into consumption taxes based on this experience. Using a case study from the State of Utah, we document that shifts in the structure of consumption played a significant role in the robustness of sales tax revenue. Two factors stand out in our results. The first factor is the structure of the tax base for sales taxes in the USA. This tax base covers only a subset of personal consumption, excluding, for example, many services. During the pandemic, when services were restricted or shut down, this caused a shift in spending toward goods that are more likely to be in the sales tax base. The second factor is the boom in e-commerce during the pandemic, which boosted sales tax collections. This was catalyzed by recent legal changes that made the collection of sales taxes in e-commerce easier. Interestingly, this e-commerce boost also shifted the point of sale and related sales tax revenues away from urban areas toward suburban areas. Our case study of the pandemic's effect on sales taxes in the USA generally, and Utah's experience specifically, provides lessons for consumption taxes, such as the VAT more broadly, and lessons on the role of consumption taxes for tax revenue volatility.
ABSTRACT
We aimed to generate an unbiased estimate of the incidence of severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) infection in 4 urban counties in Utah, USA. We used a multistage sampling design to randomly select community-representative participants >12 years of age. During May 4-June 30, 2020, we collected serum samples and survey responses from 8,108 persons belonging to 5,125 households. We used a qualitative chemiluminescent microparticle immunoassay to detect SARS-CoV-2 IgG in serum samples. We estimated the overall seroprevalence to be 0.8%. The estimated seroprevalence-to-case count ratio was 2.5, corresponding to a detection fraction of 40%. Only 0.2% of participants from whom we collected nasopharyngeal swab samples had SARS-CoV-2-positive reverse transcription PCR results. SARS-CoV-2 antibody prevalence during the study was low, and prevalence of PCR-positive cases was even lower. The comparatively high SARS-CoV-2 detection rate (40%) demonstrates the effectiveness of Utah's testing strategy and public health response.