The Influence of Taxes on Employment and Population Growth : Evidence from the Washington D.C. Metropolitan Area

In this paper, we examine whether taxes are an important determinant of economic development in a metropolitan area. We examine employment and population growth in the District of Columbia and eight surrounding suburbs in Virginia and Maryland over the period 1969-1994. We explain much of the variation in population and employment growth rates across jurisdictions in the D.C. metropolitan area with fiscal, economic, and quality-of-life variables. However, with the exception of the personal property tax on business, taxes do not appear to be a deterrent to the location of jobs and people across the D.C. metropolitan area