Fiscal Zoning, Sales Taxes, and Employment: Do Higher Sales Taxes Lead to More Jobs in Retailing and Fewer Jobs in Manufacturing?

Daria Burnes (), David Neumark and Michelle J. White ()
Additional contact information
Daria Burnes: University of California, Irvine
Michelle J. White: University of California, San Diego

No 6383, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We test the hypothesis that local government officials in jurisdictions that have higher local sales taxes are more likely to use fiscal zoning to attract retailing. We find that total retail employment is not significantly affected by local sales tax rates, but employment in big box and anchor stores is higher significantly in jurisdictions with higher sales tax rates. This suggests that local officials in jurisdictions with higher sales tax rates concentrate on attracting large stores and shopping centers. We also find that the effect of local sales taxes on big box and anchor store retail employment is larger in county interiors, where residents tend to be captive to local retailers. Finally, fiscal zoning has the opposite effect on manufacturing employment, suggesting that local officials' efforts to attract shopping centers and large stores crowd out manufacturing.

Keywords: fiscal zoning; sales taxes; retail employment; manufacturing employment (search for similar items in EconPapers)
JEL-codes: H2 J2 R3 R5 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2012-02
New Economics Papers: this item is included in nep-geo, nep-pbe and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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