EconPapers    
Economics at your fingertips  
 

State Taxes and Spatial Misallocation

Pablo Fajgelbaum (), Eduardo Morales, Juan Carlos Suárez Serrato () and Owen Zidar

No 21760, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study state taxes as a potential source of spatial misallocation in the United States. We build a spatial general equilibrium framework that incorporates salient features of the U.S. state tax system, and use changes in state tax rates between 1980 and 2010 to estimate the model parameters that determine how worker and firm location respond to changes in state taxes. We find that heterogeneity in state tax rates leads to aggregate losses. Harmonizing state taxes increases worker welfare by 0.5 percent if government spending is held constant, and by 1.0 percent if government spending responds endogenously. Harmonization of state taxes within Census regions achieves most of these gains. We also use our model to study the general equilibrium effects of recently implemented and proposed tax reforms.

JEL-codes: E6 F12 H71 R13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo, nep-mac, nep-pbe, nep-pub and nep-ure
Date: 2015-11
Note: EFG IFM ITI PE PR
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (16) Track citations by RSS feed

Downloads: (external link)
http://www.nber.org/papers/w21760.pdf (application/pdf)

Related works:
Working Paper: State Taxes and Spatial Misallocation (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:nbr:nberwo:21760

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w21760

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2018-06-15
Handle: RePEc:nbr:nberwo:21760