Fiscal Zoning and Sales Taxes: Do Higher Sales Taxes Lead to More Retailing and Less Manufacturing?
AbstractWe test the hypothesis that local government officials in jurisdictions that have higher local sales taxes are more likely to use fiscal zoning to attract retailing. We find that total retail employment is not significantly affected by local sales tax rates, but employment in big box and anchor stores is significantly increased in jurisdictions where sales tax rates increase. We also find that manufacturing employment is significantly lowered in these jurisdictions. These results suggest that local officials in jurisdictions with higher sales tax rates concentrate on attracting large stores and shopping centers and that their efforts crowd out manufacturing. A rise of one percentage point in a county-level local sales tax rate is predicted to result in 258 additional retail jobs and the loss of 838 manufacturing jobs.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16932.
Date of creation: Apr 2011
Date of revision:
Publication status: published as Burnes, Daria, David Neumark, and Michelle White, “Fiscal Zoning and Sales Taxes: Do Higher Sales Taxes Lead to More Retailing and Less Manufacturing,” forthcoming in National Tax Journal.
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Find related papers by JEL classification:
- H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
- J2 - Labor and Demographic Economics - - Demand and Supply of Labor
- R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations
This paper has been announced in the following NEP Reports:
- NEP-ACC-2011-04-16 (Accounting & Auditing)
- NEP-ALL-2011-04-16 (All new papers)
- NEP-GEO-2011-04-16 (Economic Geography)
- NEP-PBE-2011-04-16 (Public Economics)
- NEP-URE-2011-04-16 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- David Neumark & Junfu Zhang & Brandon Wall, 2005.
"Employment Dynamics and Business Relocation: New Evidence from the National Establishment Time Series,"
PPIC Working Papers
2005.11, Public Policy Institute of California.
- David Neumark & Junfu Zhang & Brandon Wall, 2006. "Employment Dynamics and Business Relocation: New Evidence from the National Establishment Time Series," Working Papers 050624, University of California-Irvine, Department of Economics.
- David Neumark & Junfu Zhang & Brandon Wall, 2005. "Employment Dynamics and Business Relocation: New Evidence from the National Establishment Time Series," NBER Working Papers 11647, National Bureau of Economic Research, Inc.
- Neumark, David & Zhang, Junfu & Wall, Brandon, 2005. "Employment Dynamics and Business Relocation: New Evidence from the National Establishment Time Series," IZA Discussion Papers 1774, Institute for the Study of Labor (IZA).
- Richard Hawkins & Matthew N. Murray, 2004. "Explaining Interjurisdictional Variations in Local Sales Tax Yield," Public Finance Review, , vol. 32(1), pages 82-104, January.
- Fischel, William A, 1992. "Property Taxation and the Tiebout Model: Evidence for the Benefit View from Zoning and Voting," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 171-77, March.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Higher local sale tax leads to more local retail activity
by Economic Logician in Economic Logic on 2011-05-26 16:38:00
- Dan S. Rickman, 2013.
"Should Oklahoma Be More Like Texas? A Taxing Decision,"
The Review of Regional Studies,
Southern Regional Science Association, vol. 43(1), pages 1-22, Summer.
- Rickman, Dan, 2013. "Should Oklahoma Be More Like Texas? A Taxing Decision," MPRA Paper 48497, University Library of Munich, Germany.
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