The poverty of states: do state tax policies affect state labor productivity?

dc.contributor.author Singh, Rajesh
dc.contributor.author Orazem, Peter
dc.contributor.author Singh, Rajesh
dc.contributor.author Orazem, Peter
dc.contributor.department Economics
dc.date 2018-02-17T17:43:20.000
dc.date.accessioned 2020-06-30T02:11:50Z
dc.date.available 2020-06-30T02:11:50Z
dc.date.issued 2012-07-01
dc.description.abstract <p>There are substantial differences in output per worker across states that have persisted over time. This study demonstrates that in the context of a neoclassical growth model, differences in marginal tax rates on income from capital investment, capital ownership, and consumption will lead to persistent differences in labor productivity across states. These theoretical predictions are supported, using data on state marginal tax rates and output per worker over the 1977-2008 sample period. Over that period, the mix of state tax policies has led to a reduction in labor productivity averaging almost 2.8% per year. The implied adverse effect of tax distortions on labor productivity across states is substantial, varying from -1.6% in Nevada to -3.9% in New York. On the other hand, government expenditure policies explain none of the variation in labor productivity across states or time. Results allow rankings of state tax structures by their adverse impacts on productivity and by their efficiency at raising revenue relative to lost productivity.</p>
dc.format.mimetype application/pdf
dc.identifier archive/lib.dr.iastate.edu/econ_las_workingpapers/115/
dc.identifier.articleid 1114
dc.identifier.contextkey 8689611
dc.identifier.s3bucket isulib-bepress-aws-west
dc.identifier.submissionpath econ_las_workingpapers/115
dc.identifier.uri https://dr.lib.iastate.edu/handle/20.500.12876/22329
dc.source.bitstream archive/lib.dr.iastate.edu/econ_las_workingpapers/115/p11552_2010_05_26.pdf|||Fri Jan 14 18:51:36 UTC 2022
dc.subject.disciplines Economics
dc.subject.keywords labor productivity
dc.subject.keywords sales tax
dc.subject.keywords property tax
dc.subject.keywords income tax
dc.subject.keywords corporate tax
dc.subject.keywords capital gains tax
dc.subject.keywords efficiency
dc.subject.keywords workers' compensation
dc.subject.keywords unemployment insurance
dc.subject.keywords growth
dc.title The poverty of states: do state tax policies affect state labor productivity?
dc.type article
dc.type.genre working_paper
dspace.entity.type Publication
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relation.isOrgUnitOfPublication 4c5aa914-a84a-4951-ab5f-3f60f4b65b3d
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