Who Benefits from State Corporate Tax Cuts? A Local Labor Market Approach with Heterogeneous Firms: Reply

Juan Carlos Suárez Serrato and Owen Zidar

American Economic Review, 2023, vol. 113, issue 12, 3401-10

Abstract: In Suárez Serrato and Zidar (2016), we estimate the incidence of state corporate taxes. Malgouyres, Mayer, and Mazet-Sonilhac (2023) highlight two errors, ignoring effects on firm composition and characterizing capital costs inconsistently. This reply corrects the structural model and corresponding incidence estimates. The incidence results are similar to the originally reported estimates and the confidence intervals widen for some estimates. In the corrected structural model, the firm owner incidence share estimate changes by 1.6 percentage points relative to the original version (i.e., 38.1 percent versus 36.5 percent). The worker share estimate is 35.0 percent. Landowners bear the remaining 26.8 percent.

JEL-codes: H22 H25 H32 H71 R23 R51 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1257/aer.20230208

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