LOST in America: Evidence on local sales taxes from national panel data

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13 Scopus citations

Abstract

This paper studies comprehensive national panel data of local option sales taxes at the monthly frequency. I calculate state-by-month population weighted averages and standard deviations of local sales tax rates. I document ten stylized facts concerning the time series patterns and spatial dynamics of local sales tax rates. The paper then proposes a "tax system" approach to tax competition where states compete on a variety of margins - including restrictions on localities' tax setting authority - that are often ignored by the standard focus on tax rates. Using spatial panel data techniques and the state-by-month population weighted averages, I find a significant association between one state's tax system and its neighboring states' tax systems.

Original languageEnglish
Pages (from-to)147-163
Number of pages17
JournalRegional Science and Urban Economics
Volume49
DOIs
StatePublished - Nov 1 2014

Bibliographical note

Publisher Copyright:
© 2014 Elsevier B.V.

Keywords

  • Commodity taxation
  • Fiscal federalism
  • Local public finance
  • Municipal autonomy
  • Spatial tax competition
  • Tax systems

ASJC Scopus subject areas

  • Economics and Econometrics
  • Urban Studies

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