Empirical research in public economics, including our own, often uses variation in state and local taxes as an empirical laboratory to estimate causal relationships. A key concern is that other taxes might change at the same time. To assess this concern, we develop a dataset of state (1977-2022)...

This paper examines the effect of federal deductibility of state and local taxes on the fiscal behavior of state and local governments. The primary finding is that deductibility affects the way that state-local governments finance their spending as well as the overall level of spending. More...

Although states and localities collect a substantial amount of revenue from corporate profits taxes and property taxes on corporate capital, these taxes have been inadequately reflected in previous calculations of the effective corporate tax rate and the pretax rate of return to corporate...

This essay describes and evaluates state and local business tax incentives in the United States. In 2014, states spent between $5 and $216 per capita on incentives for firms in the form of firm-specific subsidies and general tax credits, which mostly target investment, job creation, and research...

Federal deductibility for state and local taxes constitutes one of the largest tax expenditures in the federal budget and provides a significant source of federal support to state and local governments. Deductibility was restricted in the Tax Reform Act of 1986 by removing the deduction for...

I compute the lifetime tax incidence of the major state and local taxes used in the United States during the 1980s. Using data from the Consumer Expenditure Survey, I show that over the life cycle, general sales taxes are progressive and equally as progressive as state and local income taxes....

This paper considers the impact of federal deductibility on the level and composition of state and local taxes. It also considers the importance of deductibility in determining the vote of state Congressional delegations on the Tax Reform Act of 1986. Particular emphasis should be placed on the...

The rapid rise in sales over the Internet has generated debate over the taxation of such transactions since the buyers usually pay no sales tax. This paper uses new data on the purchase decisions of approximately 25,000 online users to examine the effects that local sales taxes have on Internet...

We collect detailed data on U.S. state personal income, corporate, sales, cigarette, gasoline, and alcohol taxes over the past 70 years to shed light on the determinants of state tax policies. We provide a comprehensive summary of how tax policy has changed over time, within and across states....

California has the highest Earned Income Tax (EITC) supplement to the federal EITC, with an 85% supplement rate. However, we find that despite the apparent generosity of the California EITC, there is no employment effect on less-skilled single mothers, in sharp contrast to the evidence of...