TY - JOUR
T1 - The effect of state income taxation on per capita income growth
AU - Holcombe, Randall G.
AU - Lacombe, Donald J.
PY - 2004/5
Y1 - 2004/5
N2 - This study examines the impact of changes in marginal state income tax rates on per capita income by comparing income growth in counties on state borders with income growth in adjacent counties across the state border. Compared to a standard cross-sectional analysis, this border-matching technique is a better way to hold constant many factors that can vary for geographical reasons, such as climate, culture, and proximity to markets. The results show that over the 30-year period from 1960 to 1990, states that raised their income tax rates more than their neighbors had slower income growth and, on average, a 3.4% reduction in per capita income.
AB - This study examines the impact of changes in marginal state income tax rates on per capita income by comparing income growth in counties on state borders with income growth in adjacent counties across the state border. Compared to a standard cross-sectional analysis, this border-matching technique is a better way to hold constant many factors that can vary for geographical reasons, such as climate, culture, and proximity to markets. The results show that over the 30-year period from 1960 to 1990, states that raised their income tax rates more than their neighbors had slower income growth and, on average, a 3.4% reduction in per capita income.
KW - Income growth
KW - Per capita income
KW - State borders
KW - State income taxation
KW - State tax policies
UR - http://www.scopus.com/inward/record.url?scp=2442572126&partnerID=8YFLogxK
U2 - 10.1177/1091142104264303
DO - 10.1177/1091142104264303
M3 - Article
AN - SCOPUS:2442572126
SN - 1091-1421
VL - 32
SP - 292
EP - 312
JO - Public Finance Review
JF - Public Finance Review
IS - 3
ER -