Who Benefits from State Corporate Tax Cuts? A Local Labor Markets Approach with Heterogeneous Firms
Juan Carlos Suárez Serrato () and
American Economic Review, 2016, vol. 106, issue 9, 2582-2624
This paper estimates the incidence of state corporate taxes on the welfare of workers, landowners, and firm owners using variation in state corporate tax rates and apportionment rules. We develop a spatial equilibrium model with imperfectly mobile firms and workers. Firm owners may earn profits and be inframarginal in their location choices due to differences in location-specific productivities. We use the reduced-form effects of tax changes to identify and estimate incidence as well as the structural parameters governing these impacts. In contrast to standard open economy models, firm owners bear roughly 40 percent of the incidence, while workers and landowners bear 30-35 percent and 25-30 percent, respectively.
JEL-codes: H22 H25 H32 H71 R23 (search for similar items in EconPapers)
Note: DOI: 10.1257/aer.20141702
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
https://www.aeaweb.org/articles/attachments?retrie ... N5VahBSXCG6IPPXGIyYU (application/zip)
https://www.aeaweb.org/articles/attachments?retrie ... NaHIJDZFAYxbXRrae216 (application/pdf)
https://www.aeaweb.org/articles/attachments?retrie ... wb_nub3I0GHGaOzGoRIs (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.
Working Paper: Who benefits from state corporate tax cuts? A local labour markets approach with heterogeneous firms (2015)
Working Paper: Who Benefits from State Corporate Tax Cuts? A Local Labor Markets Approach with Heterogeneous Firms (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:106:y:2016:i:9:p:2582-2624
Ordering information: This journal article can be ordered from
Access Statistics for this article
American Economic Review is currently edited by Pinelopi Koujianou Goldberg
More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Series data maintained by Jane Voros ().