Heterogeneous Workers and Federal Income Taxes in a Spatial Equilibrium

• 成果类型: Article
• 署名作者: Colas, Mark; Hutchinson, Kevin
• 署名单位: University of Oregon; Uber Technologies, Inc.
• 刊物名称: AMERICAN ECONOMIC JOURNAL-ECONOMIC POLICY
• ISSN/ISSBN: 1945-7731
• DOI: 10.1257/pol.20180529
• 发表日期: 2021
• 页码: 100-134
• 关键词: wage inequality; determinants; immigration; EFFICIENCY; location

摘要

We study the geographic incidence and efficiency of an income tax by estimating a spatial equilibrium model with heterogeneous workers. The US income tax shifts households out of high-productivity cities, leading to locational inefficiency of 0.25 percent of output. Removing spatial tax distortions increases inequality because more educated households are more mobile and own larger shares of land. Flattening the tax schedule, or introducing cost-of-living adjustments or local wage adjustments leads to efficiency gains but causes substantial increases in inequality. Differences in mobility and land ownership across skill groups create an equity-efficiency trade-off that is unique to spatial settings.