Regional effects of federal tax shocks

Bernd Hayo and Matthias Uhl

Southern Economic Journal, 2015, vol. 82, issue 2, 343-360

Abstract: This article studies the effects of federal tax changes on U.S.‐state‐level income. Utilizing an exogenous tax shock series recently proposed in the literature, we find considerable variation in how federal tax changes affect regional income: estimated state income multipliers range between –0.2 in Utah and –3.7 in Hawaii. Analyzing the determinants of differences in regional tax multipliers suggests that size and composition of the state tax base help explain the observed heterogeneity in the transmission of federal tax policy.

Date: 2015
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https://doi.org/10.1002/soej.12026

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Working Paper: Regional Effects of Federal Tax Shocks (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:soecon:v:82:y:2015:i:2:p:343-360

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