EconPapers    
Economics at your fingertips  
 

The Tax Gradient: Spatial Aspects of Fiscal Competition

David Agrawal ()

American Economic Journal: Economic Policy, 2015, vol. 7, issue 2, 1-29

Abstract: State borders create a discontinuous tax treatment of retail sales. In a Nash game, local tax rates will be higher on the low state tax side of a border. Local taxes will decrease from the nearest high-tax border and increase from the low-tax border. Using driving time from state borders and all local sales tax rates, local tax rates on the low tax side of the border are 1.25 percentage points higher, reducing the differential in state tax rates by over three-quarters. A ten minute increase in driving time from the nearest high-tax state lowers a border town's local tax rate by 6 percent. (JEL H25, H71, H73, H77)

JEL-codes: H25 H71 H73 H77 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/pol.20120360
References: Add references at CitEc
Citations View citations in EconPapers (22) Track citations by RSS feed

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/pol.20120360 (application/pdf)
http://www.aeaweb.org/aej/pol/ds/0702/2012-0137_ds.zip (application/zip)
http://www.aeaweb.org/aej/pol/data/0702/2012-0137_data.zip (application/zip)
http://www.aeaweb.org/aej/pol/app/0702/2012-0137_app.pdf (application/pdf)
http://www.aeaweb.org/aej/pol/data/0702/2012-0360_data.zip (application/zip)
http://www.aeaweb.org/aej/pol/ds/0702/2012-0360_ds.zip (application/zip)
http://www.aeaweb.org/aej/pol/app/0702/2012-0360_app.pdf (application/pdf)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: The Tax Gradient: Spatial Aspects of Fiscal Competition (2015) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aejpol:v:7:y:2015:i:2:p:1-29

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Journal: Economic Policy is currently edited by Matthew Shapiro

More articles in American Economic Journal: Economic Policy from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().

 
Page updated 2018-08-12
Handle: RePEc:aea:aejpol:v:7:y:2015:i:2:p:1-29