Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7383843 | Regional Science and Urban Economics | 2014 | 17 Pages |
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.
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Authors
David R. Agrawal,