There are substantial differences in output per worker across states that persist over time. This studydemonstrates that differences in state taxation of capital income, capital ownership, and consumption canexplain why differences in labor productivity can persist. First, state tax policies...

There are substantial differences in output per worker across states that have persisted over time.  This study demonstrates that in the context of a neoclassical growth model, differences in marginal tax rates on income from capital investment, capital ownership, and consumption will lead to...