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Abstract
A computable general equilibrium model is used to compare the
economic impact of subsidies between professional and technical services,
high-technology manufacturing and traded services. The results
suggest that the largest increase in aggregate real income is a factor tax
deduction on capital to high -technology manufacturing. A factor tax
deduction for the purchase of labor within professional and technical
services industries increases aggregate real income in comparison to the
same subsidy awarded to high-technology manufacturing or traded services.
However, subsidies to either high-technology manufacturing or
traded services result in increased income inequality. Only a subsidy to
traded services decreases income inequality.