Fiscal zoning and sales taxes: do higher sales taxes lead to more retailing and less manufacturing?

Daria Burnes, Michelle J. White and David Neumark

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We test the hypothesis that local government officials in jurisdictions that have higher local sales taxes are more likely to use fiscal zoning to encourage retailing. We find that total retail employment is not significantly affected by local sales tax rates, but employment in big box and anchor stores is higher significantly in jurisdictions with higher sales tax rates. This suggests that local officials in jurisdictions with higher sales taxes concentrate on attracting large stores and shopping centers. We also find that the effect of local sales taxes on big box and anchor store retail employment is larger in county interiors, where residents tend to be captive to local retailers. Finally, fiscal zoning has the opposite effect on manufacturing employment, suggesting that local officials’ efforts to attract shopping centers and large stores crowd out manufacturing.

JEL-codes: J1 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2011-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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http://eprints.lse.ac.uk/58081/ Open access version. (application/pdf)

Related works:
Journal Article: Fiscal Zoning and Sales Taxes: Do Higher Sales Taxes Lead to More Retailing and Less Manufacturing? (2014)
Working Paper: Fiscal Zoning and Sales Taxes: Do Higher Sales Taxes Lead to More Retailing and Less Manufacturing? (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:58081

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