LOST in America: Evidence on local sales taxes from national panel data

David Agrawal

Regional Science and Urban Economics, 2014, vol. 49, issue C, 147-163

Abstract: This paper studies comprehensive national panel data of local option sales taxes at the monthly frequency. I calculate state-by-month population weighted averages and standard deviations of local sales tax rates. I document ten stylized facts concerning the time series patterns and spatial dynamics of local sales tax rates. The paper then proposes a “tax system” approach to tax competition where states compete on a variety of margins – including restrictions on localities' tax setting authority – that are often ignored by the standard focus on tax rates. Using spatial panel data techniques and the state-by-month population weighted averages, I find a significant association between one state's tax system and its neighboring states' tax systems.

Keywords: Commodity taxation; Local public finance; Fiscal federalism; Spatial tax competition; Tax systems; Municipal autonomy (search for similar items in EconPapers)
JEL-codes: H20 H71 H77 K34 L81 R10 R50 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Working Paper: Lost in America: Evidence on Local Sales Taxes from National Panel Data (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:49:y:2014:i:c:p:147-163

DOI: 10.1016/j.regsciurbeco.2014.09.006

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