TY  - BOOK
AU  - Fajgelbaum,Pablo D.
AU  - Morales,Eduardo
AU  - Suárez Serrato,Juan Carlos
AU  - Zidar,Owen M.
ED  - National Bureau of Economic Research.
TI  - State Taxes and Spatial Misallocation
T2  - NBER working paper series
PY  - 2015///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - November 2015; Hardcopy version available to institutional subscribers
N2  - 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 welfare losses. In terms of consumption equivalent units, harmonizing state taxes increases worker welfare by 0.6 percent if government spending is held constant, and by 1.2 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
UR  - https://www.nber.org/papers/w21760
UR  - http://dx.doi.org/10.3386/w21760
ER  -