Correlation in State and Local Tax Changes

Scott Baker, Pawel Janas and Lorenz Kueng
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Pawel Janas: Kellogg School of Management - Department of Finance

No 20-115, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: We develop a comprehensive dataset of state and local taxes from 2000-2015 that includes personal income taxes, property taxes, corporate income taxes, sales taxes, estate taxes and excise taxes. We illustrate how state and local taxes have changed over time, in response to business cycles, and to what extent different taxes co-move within a state or locality. Across states and local jurisdictions, large differences in the mix of taxes are observed, and these differences have tended to become more pronounced over time. Moreover, we note that different types of taxes tend to co-move within a state or local jurisdiction, highlighting the importance for researches to take into account the entirety of the tax system, rather than just a single tax type, when examining household or firm responses to state and local tax changes. At both a state and local level, increases in tax rates of all types tend to increase tax revenue but worsen business conditions and employment.

Keywords: Local taxes; state taxes; income tax; corporate income tax; sales tax; property tax (search for similar items in EconPapers)
JEL-codes: H20 H71 H72 H77 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2020-08
New Economics Papers: this item is included in nep-acc, nep-pbe, nep-pub and nep-ure
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https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3648513 (application/pdf)

Related works:
Journal Article: Correlation in state and local tax changes (2025)
Working Paper: Correlation in State and Local Tax Changes (2024)
Working Paper: Correlation in State and Local Tax Changes (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp20115

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