Abstract
We consider the mix of taxes chosen by a state government to minimize reductions in employment growth. The optimal mix of taxes requires that the decrease in employment growth for an additional dollar of revenue is equal for all taxes. We test this prediction using state-level data from 1980-1994. We find the corporate income tax has a significant negative impact on employment while the sales and individual income taxes do not. Our results also suggest that states are not choosing the mix of taxes to minimize losses in employment growth with corporate income taxes set relatively too high.
| Original language | English |
|---|---|
| Pages (from-to) | 7-26 |
| Number of pages | 20 |
| Journal | National Tax Journal |
| Volume | 56 |
| Issue number | 1 I |
| DOIs | |
| State | Published - Mar 2003 |
ASJC Scopus subject areas
- Accounting
- Finance
- Economics and Econometrics