Income Tax Adoption and Spatial Diffusion

Joshua Hall, Donald Lacombe, Maria Tackett

Research output: Contribution to journalArticlepeer-review

1 Scopus citations


In recent years, a number of papers have looked at the adoption and diffusion of taxes across national, state, and local governments. Spending pressures, reductions in tax collection costs, median voter preferences, and social learning have been found to play an important role in the adoption of the income tax. Spatial econometrics were used to study the diffusions of income taxes across states from 1900 to 2010. Using United States Census Bureau data, negative spatial autocorrelation in income tax adoption was found. This is consistent with Tiebout competition reducing the likelihood of income tax adoption. States whose neighbors adopted income taxes were less likely to do so. This work informs the literature on policy diffusion as well as the understanding of why only some states utilize the income tax.

Original languageEnglish
Pages (from-to)185-193
Number of pages9
JournalAtlantic Economic Journal
Issue number2
StatePublished - Jun 1 2020


  • D7
  • H1
  • Policy diffusion
  • Spatial Durbin
  • Spatial probit
  • Tax adoption


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