State-level implications of federal tax policies

• 成果类型: Article; Proceedings Paper
• 署名作者: Liu, Chang; Williams, Noah
• 署名单位: University of Wisconsin System; University of Wisconsin Madison; University of Wisconsin System; University of Wisconsin Madison
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2019.04.005
• 发表日期: 2019
• 页码: 74-90
• 关键词: Proxy SVAR; Federal income tax; Capital share; Sectoral reallocation

摘要

The United States federal fiscal policy has differential impact across states. We construct a new quarterly state-level dataset that we use to analyze the impact of unexpected changes in federal personal and corporate income taxes. We find substantial heterogeneity across states, with more than half having no significant response to the tax cuts. In addition, less capital intensive states have larger responses to corporate tax cuts. Although puzzling in standard models, a model with corporate and non-corporate sectors is consistent with this evidence. Overall, our results suggest the importance of variation and reallocation across states in evaluating federal policy. (C) 2019 Elsevier B.V. All rights reserved.