دانلود رایگان مقاله انگلیسی مالیات فروش محلی، اشتغال و رقابت مالیاتی - الزویر 2018

ABSTRACT

Most analysis of the economic impacts of sales taxes does not include local taxes, despite the fact that they account for one-fifth of all sales tax collections and vary widely across states. This paper addresses that omission, estimating the effect of sales taxes on employment at state borders using county-level quarterly data and a newly developed data set of local county tax rates. The findings indicate that sales tax increases, relative to cross-border neighbors, lead to losses of employment, as well as payroll and hiring, but these effects are only found in counties with large shares of residents working in another state. The employment effects are also likely to be relatively short-lived, as they occur in the period before tax competition occurs and competitive jurisdictions are able to strategically respond and minimize cross-border tax differentials. Comparing estimates of sales tax effects with and without local county sales taxes show that omitting county taxes does not lead to meaningfully different estimates.

5. Discussion and conclusion

This paper examines the effects of increases in state and county sales taxes on employment (and payroll and hiring) in state border areas. Combined sales tax rates appear to influence employment, payroll, and hiring, but those effects are concentrated in counties with relatively high levels of cross-state commuting. One key result highlighted in the analysis is that for county pairs with the highest levels of cross-state commuting among the workforce – with 22 percent or more of employed residents traveling to another state for work – the county share of employment declines 0.34 percentage points following a one point increase in the combined state and county sales tax rate. The construction of the employment share dependent variable in the presence of employment spillovers following shifts in cross-border shopping suggests that these effects represent an upper bound on the actual employment decline an individual county will face. Regressions exploring the effects using several alternative dependent variables indicate that spillovers are likely, and that the effects on county employment will be between two thirds and one half as large as our results suggest.

Despite the concern implicitly raised by Agrawal's (2015) research on the strategic response by border-area local governments to statelevel sales taxes – where local policy changes work to diminish crossstate differences – our results suggest that using only state-level rates does not impart a downward bias to our estimates. When we include local county rates, the employment effects actually rise modestly. Our state and county sales tax rate data do confirm the presence of the relationship described in Agrawal (2015). In the cross-section we observe a negative correlation between local county rates and the own-state rate, and a positive correlation between the county rate and the combined rate in the cross-border neighbor (Table 5). The correlation coefficients in our rates for 2009 Q2, for example, are −0.2 and +0.1, respectively.