1.) Compute the compound average growth rate (CAGR) for personal income and each tax revenue source;

2.) Use the CAGR for personal income and the tax revenue sources to estimate the income elasticity of tax revenue of each tax revenue source;

3.) Use the income elasticity of tax revenue measures to assess the vertical equity of each tax revenue source;

4.) Develop a revenue forecast for each tax revenue source for FY 2017-FY 2021 and briefly defend the method used for the revenue forecast

5.) Examine the 2003 and 2008 cigarette tax rate increases and estimate the tax rate elasticity of cigarette tax revenue.

Fiscal Year Personal Income in millions) Gasoline Tax Revenue (in millions) Gasoline Tax Rate (cents per gallon) Sales Tax Revenue (in millions) Sales Tax Rate % of sales price) Personal Income Tax Revenue (in millions) 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Forecast Forecast Forecast Forecast Forecast $95,303.80 $99,501.82 $105,050.13 $112,850.37 $119,027.67 $126,121.52 $131,505.67 $139,189.28 $148,290.62 $157,512.38 $166,445.34 $174,492.64 $176,159.26 $179,844.47 $185,975.30 $192,417.29 $201.731.62 $211,520.59 $221,342.55 $222,409.35 $222,655.79 $235,095.65 $248,276.33 $257,025.75 $260,361.12 $272,529.30 $282,505.53 $293,030.27 $306, 316.99 $321,482.04 $336,868.54 $352,200.15 $395.73 $397.28 $399.94 $405.73 $420.24 $430.81 $437.10 $443.87 $455.57 $466.43 $464.15 $493.68 $480.81 $518.30 $582.61 $579.68 $570,49 $570.63 $553.46 $535.89 $540.70 $543.04 $534.70 $529.62 $527.29 $540.08 $556.82 $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.165 $0.18 $0.18 $0.18 $0.18 $0.18 $0.18 $0.18 $0.18 $0.18 $0.18 $0.18 $0.18 $0.18 $2,136.70 $2,201.40 $2,264.10 $2,388.00 $2,601.40 $2,808.75 $2,966.15 $3,138.33 $3,278.77 $3,423.37 $3,687.40 $3,723.14 $3,798.49 $4,210.26 $4,759.45 $5,001.15 $5,336.78 $5,423.50 $5,738.83 $6,205.64 $5,963.87 $6,269.74 $6,631.95 $6,805.07 $7,003.66 $7,278.60 $7,306.33 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.5% 6.0% 6.0% 6.0% 6.0% 6.83% 7.0% 70% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% $2,089.54 $2,183.97 $2,246.76 $2,412.47 $2,541.90 $2,767.74 $2,966.27 $3,197.12 $3,433.44 $3,699.32 $3,753.34 $3,779.81 $3,540.82 $3,644.16 $3,807.86 $4,213.21 $4,381.55 $4,615.60 $4,837.52 $4,313.76 $3,875.57 $4,585.55 $4,765.46 $4,972.81 $4,896.32 $5,232.98 $5,218.17 Personal Income Tax Rate(% of taxable income) 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.35% 3.3% Ggarette Tax Cigarette Tax Rate Revenue (in (cents per pack) millions) $112.74 $0.155 $110.11 $0.155 $111.26 $0.155 $110.28 $0.155 $113.38 $0.155 $123.03 $0.155 $123.72 $0.155 $128.42 $0.155 $127.97 $0.155 $127.63 $0.155 $125.15 $0.155 $120.83 $0.155 $123.21 $0.155 $352.38 $0.523 $338.72 $0.555 $343.08 $0.555 $355.52 $0.555 $367.63 $0.555 $525.27 $0.960 $516.76 $0.995 $482.01 $0.995 $478.61 $0.995 $456.17 $0.995 $461.64 $0.995 $447.56 $0.995 $439.26 $0.995 $443.21 $0.995 Fiscal Year Personal Income in millions) Gasoline Tax Revenue (in millions) Gasoline Tax Rate (cents per gallon) Sales Tax Revenue (in millions) Sales Tax Rate % of sales price) Personal Income Tax Revenue (in millions) 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Forecast Forecast Forecast Forecast Forecast $95,303.80 $99,501.82 $105,050.13 $112,850.37 $119,027.67 $126,121.52 $131,505.67 $139,189.28 $148,290.62 $157,512.38 $166,445.34 $174,492.64 $176,159.26 $179,844.47 $185,975.30 $192,417.29 $201.731.62 $211,520.59 $221,342.55 $222,409.35 $222,655.79 $235,095.65 $248,276.33 $257,025.75 $260,361.12 $272,529.30 $282,505.53 $293,030.27 $306, 316.99 $321,482.04 $336,868.54 $352,200.15 $395.73 $397.28 $399.94 $405.73 $420.24 $430.81 $437.10 $443.87 $455.57 $466.43 $464.15 $493.68 $480.81 $518.30 $582.61 $579.68 $570,49 $570.63 $553.46 $535.89 $540.70 $543.04 $534.70 $529.62 $527.29 $540.08 $556.82 $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.15 $0.165 $0.18 $0.18 $0.18 $0.18 $0.18 $0.18 $0.18 $0.18 $0.18 $0.18 $0.18 $0.18 $0.18 $2,136.70 $2,201.40 $2,264.10 $2,388.00 $2,601.40 $2,808.75 $2,966.15 $3,138.33 $3,278.77 $3,423.37 $3,687.40 $3,723.14 $3,798.49 $4,210.26 $4,759.45 $5,001.15 $5,336.78 $5,423.50 $5,738.83 $6,205.64 $5,963.87 $6,269.74 $6,631.95 $6,805.07 $7,003.66 $7,278.60 $7,306.33 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.5% 6.0% 6.0% 6.0% 6.0% 6.83% 7.0% 70% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% $2,089.54 $2,183.97 $2,246.76 $2,412.47 $2,541.90 $2,767.74 $2,966.27 $3,197.12 $3,433.44 $3,699.32 $3,753.34 $3,779.81 $3,540.82 $3,644.16 $3,807.86 $4,213.21 $4,381.55 $4,615.60 $4,837.52 $4,313.76 $3,875.57 $4,585.55 $4,765.46 $4,972.81 $4,896.32 $5,232.98 $5,218.17 Personal Income Tax Rate(% of taxable income) 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% 3.35% 3.3% Ggarette Tax Cigarette Tax Rate Revenue (in (cents per pack) millions) $112.74 $0.155 $110.11 $0.155 $111.26 $0.155 $110.28 $0.155 $113.38 $0.155 $123.03 $0.155 $123.72 $0.155 $128.42 $0.155 $127.97 $0.155 $127.63 $0.155 $125.15 $0.155 $120.83 $0.155 $123.21 $0.155 $352.38 $0.523 $338.72 $0.555 $343.08 $0.555 $355.52 $0.555 $367.63 $0.555 $525.27 $0.960 $516.76 $0.995 $482.01 $0.995 $478.61 $0.995 $456.17 $0.995 $461.64 $0.995 $447.56 $0.995 $439.26 $0.995 $443.21 $0.995