Our Experience

Industries Petroleum Natural Gas Chemicals Electronics Pharmaceuticals, Medical Devices, & Biotech Retail/Consumer Goods Technology Transportation Local/State Government School Districts Other Industries

Functional Areas Antitrust & Competition Analysis of Damages Forensic Economics Intangibles/IP Labor Economics Regulatory Economics & Finance Transfer Pricing Taxation Valuation Fiscal Impact Analysis Demographic Analysis Public Policy Analysis

 

Fiscal Impact Analysis

IIC, Inc. has considerable experience designing and implementing economic impact assessment methods including cost-benefit analysis, fiscal impact analysis, tax impact analysis, and financial analysis. We have worked with many different government agencies at the federal state and local levels and we have trained client staff in the use of several of our models.

Impact Fees Development

For the Miami-Dade County School District, we developed a fiscal impact model that analyzed the impact of new residential development on school enrollment, and the cost of such development in terms of the number of new school stations required to meet the demand caused directly by the new development. We developed impact fees based on our assessment methodology that considered the type of residence (condo, apartment, single family dwelling), size (e.g., number of bedrooms), location, and cost of new school construction. We have subsequently analyzed the impact of changes in development patterns and growth trends on the fiscal impact model.

Economic Impact Model for Oil and Gas Supply

For the U.S. Department of Interior, Minerals Management Service (MMS), we developed an economic impact model that analyzed future trends in the supply of oil and gas in the Gulf of Mexico. Once this supply model was developed, we then analyzed the effects of different federal policies with regard to royalty, tax and lease bonus payments on actual exploration and development programs in the Gulf of Mexico as well as the fiscal impact of such policies in terms of revenue collection. In particular, we were asked to assess the economic impacts of the Deepwater Royalty Relief Program that was implemented during the late 1990s to determine the effect of the program in terms of stimulating exploration and development activity vis-à-vis the loss in royalty revenue. This cost- benefit analysis was used by MMS in considering alternative royalty policies aimed at stimulating offshore leasing and oil and gas development.

Impact of Tax Expenditure Programs

For the U.S. Small Business Administration, Office of Advocacy, we developed an economic impact model that analyzed the differential impacts of the major tax expenditure programs on small and large business. The model estimated over a three-year historical period the reduction in the effective tax rate resulting from each program as between businesses that were classified as small vs. large, as measured by number of employees. We relied on data from the Statistics of Income Division of the Internal Revenue Service in measuring these tax impacts. Our model showed that with the exception of the travel and entertainment deduction, most tax expenditure programs provided a significantly greater benefit to large companies in terms of reducing g their effective tax rate.

Tax Incidence Analysis

For a number of state agencies including Attorneys General and tax collection agencies, we developed an economic model that measured the incidence of various state business taxes that were found to be unconstitutional and required the distribution of refunds. The economic tax incidence model was used to determine the extent to which the tax was passed on downstream to consumers as opposed to being absorbed by the companies making the claim for the refund. This model was built on the economic theory of tax incidence analysis and considered the supply and demand conditions in the relevant industry as well the nature of competition in developing incidence estimates.

Cost-Benefit Assessments

IIC, Inc. and its staff have developed various models that estimate the return on investment and the cost-benefit tradeoff of various tax programs as well as investment financing incentives. For example, IIC, Inc. studied the market for litigation technology tools in the banking industry for a vendor of these tools. Our study demonstrated the need for technology tools in the corporate legal departments of the nation’s banks, and highlighted how these tools could improve the cost-effectiveness and efficiency of the attor­neys. In addition, the study found that spending money on automation could lessen considerably the need for contracting with outside counsel on litigation matters.

For a manufacturer of computers and imaging technology, IIC, Inc. devel­oped a methodology for performing cost justification analyses of litigation support technologies in the legal environment. The model quantified the benefits to be derived from an auto­mated litigation support and imaging systems by a law firm and weighed them against the costs of acquiring and implementing these systems. IIC, Inc. wrote a manual on performing cost justification studies for the manufacturer and assisted sales personnel with performing cost justification analyses for numerous law firms considering imaging technology upgrades.