The Effect of State Taxes on the Geographical Location of Top Earners: Evidence from Star Scientists

Enrico Moretti and Daniel Wilson

American Economic Review, 2017, vol. 107, issue 7, 1858-1903

Abstract: We quantify how sensitive is migration by star scientists to changes in personal and business tax differentials across states. We uncover large, stable, and precisely estimated effects of personal and corporate taxes on star scientists' migration patterns. The long-run elasticity of mobility relative to taxes is 1.8 for personal income taxes, 1.9 for state corporate income tax, and —1.7 for the investment tax credit. While there are many other factors that drive when innovative individuals and innovative companies decide to locate, there are enough firms and workers on the margin that state taxes matter.

JEL-codes: H24 H25 H71 H73 J44 J61 R32 (search for similar items in EconPapers)
Date: 2017
Note: DOI: 10.1257/aer.20150508
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Citations: View citations in EconPapers (172)

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Related works:
Working Paper: The Effect of State Taxes on the Geographical Location of Top Earners: Evidence from Star Scientists (2016)
Working Paper: The Effect of State Taxes on the Geographical Location of Top Earners: Evidence from Star Scientists (2015)
Working Paper: The effect of state taxes on the geographical location of top earners: evidence from star scientists (2015)
Working Paper: The Effect of State Taxes on the Geographical Location of Top Earners: Evidence from Star Scientists (2015)
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