Do higher income taxes on top earners trickle down? A local labor markets approach

• 成果类型: Article
• 署名作者: Kindsgrab, Paul M.
• 署名单位: University of Michigan System; University of Michigan
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2022.104689
• 发表日期: 2022
• 关键词: Top Income Taxation; tax incidence; optimal taxation

摘要

This paper measures how much higher income taxes on U.S. top 1% earners trickle down and reduce other workers' wages via geographically concentrated spillovers. Using an exposure design that combines time-series variation in the federal marginal tax rate for top 1% earners with cross-sectional variation in the top 1% income share across local labor markets, I find very little evidence of local trickle-down effects. The point estimates imply zero local trickle-down effects. At conventional levels of confidence, the esti-mates are statistically inconsistent with a one percentage point increase in the top tax rate reducing worker wages by more than -0.08%. These results undermine claims that trickle-down effects should be an important consideration in setting top tax rates.(c) 2022 Elsevier B.V. All rights reserved.