Tax Impact Comprehensive?

Hello Danny, We apologize for the delay in responding. Unless you modify the model to indicate otherwise, the assumption is that all labor dollars are new to the region and thus the Household Spending Patterns that are triggered by the Labor Income payments do make purchases of rent for apartments and condos and home ownership and mortgage expenses including their associated taxes (this is displayed in the Taxes on Production and Imports: Property Taxes). However, please keep in mind that while the total values for each tax payer (Employee Compensation, Proprietor Income, TOPI, Households, and Corporations) are real and representative, the split of taxes between the listed categories (sales, severence, property, etc.) is based on national averages across all industries. For the Indirect and Induced tax impacts, which involve a large number and variety of sectors, this is a good approximation of the taxes generated by these impacts. However, if you have better data for the Direct Tax Impact, we certainly recommend using your own calculations for this. The tax impact report has a View By: field that can be used to separate out the Direct Taxes from the Indirect and Induced. If you do make a modification to the Direct Taxes you will want to recalculate your totals. Please let us know if you have any additional questions.

Thank you for the response. So here is my follow up: I'm running an analysis on a new healthcare facility with 30 new direct jobs, and another 9 indirect/induced. Yet I'm only getting $22,164 in total annual property taxes according to the software. Given that the business itself is going to have a facility worth around $6 million, property tax for the business alone should be in excess of $22,000, not including any new households and their tax payments. I know that the split of taxes is based on national averages, but it seems like it shouldn't be this far off. Also, you make a good point about using my own direct tax data, but where could I input that? As far as I can tell in the events, you can only input jobs, labor income, or output. There's no way to input direct taxes and then run the model, is there? thanks.

Hi Danny, Could you send us your model (to implangroup@implan.com) or provide us with the region and data year that you are working with and some information on how you setup your impact. We would like to take a look at it internally to be sure that we are correctly addressing your question. Thanks!

Hi Danny, Thank you for sending in your model. Several things to note: 1. You only ran a Scenario for the operations portion of your impact – I do not see a Scenario for the construction phase. 2. However, the property taxes paid by the hospital itself won’t show up in the construction portion of the analysis – only in the operations phase. The direct property taxes in the construction Scenario are those paid by the construction companies on their own properties. 3. You say that it is a $6 million hospital, yet the direct output in the operations Activity is only $2 million. And the direct output of the construction Activity is only $3.8 million – if the structure itself is worth $6 million, then that needs to be the direct Output in the construction Activity. 4. Once all of these things get sorted out, you may still feel that the direct property taxes are too low on the hospital operations Scenario – this is common because the hospital sector is a mix of for-profit and non-profit hospitals, and the non-profit hospitals do not pay property taxes. This brings us back to our suggestion to overwrite the direct tax impacts with your own estimates and then make the same adjustment to the total tax impacts and also to direct and total output impacts since IBT is part of Output. You cannot make these changes within the software – just externally within your report. Please let us know if we can be of further assistance.