The Effect of State Corporate Income Tax Rate Cuts on Job Creation
This paper compares the employment growth of states that enacted corporate income tax rate cuts in the past 23 years with those making no changes. Overall employment comparisons from 1990 to 2012 suggest that a reduction in the corporate income tax rate is associated with faster job creation. The states that cut corporate income tax rates started with slower employment growth than the states that made no changes. However, the growth gaps between the two groups of states disappeared in about five years after the tax cuts were made. Regression results confirm the observation that lower corporate tax rates have a significant and positive effect on employment growth. The enactment of a tax rate cut also has the additional but temporary benefit of promoting job creation as businesses adjust to the new tax rate. However, this benefit is temporary and only occurs during first year of the enactment of a tax cut.
Year of publication: |
2013
|
---|---|
Authors: | Shuai, Xiaobing ; Chmura, Christine |
Published in: |
Business Economics. - Palgrave Macmillan, ISSN 0007-666X. - Vol. 48.2013, 3, p. 183-193
|
Publisher: |
Palgrave Macmillan |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
The effect of state corporate income tax rate cuts on job creation
Shuai, Xiaobing, (2013)
-
Are social networks a double-edged sword? : a case study of defense contractors
Shuai, Xiaobing, (2018)
-
The Effect of State Corporate Income Tax Rate Cuts on Job Creation
Shuai, Xiaobing, (2013)
- More ...