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Lost in America: Evidence on Local Sales Taxes from National Panel Data

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  • David Agrawal

Abstract

This paper studies comprehensive national panel data of local option sales taxes at the monthly frequency. I calculate state-by-month population weighted averages of local sales tax rates. I document ten stylized facts concerning the time series patterns and spatial dynamics of local sales taxes. The paper then considers a “tax system” approach to tax competition where states compete on a variety of margins that are often ignored by the standard focus on tax rates. Using the state-by-month averages, I find a significant association between one state’s tax system and its neighboring states’ tax systems.

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  • David Agrawal, 2014. "Lost in America: Evidence on Local Sales Taxes from National Panel Data," CESifo Working Paper Series 4943, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_4943
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    Cited by:

    1. repec:kap:itaxpf:v:24:y:2017:i:5:d:10.1007_s10797-016-9422-3 is not listed on IDEAS
    2. David R. Agrawal & William F. Fox, 2017. "Taxes in an e-commerce generation," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 24(5), pages 903-926, September.
    3. David R. Agrawal, 2015. "The Tax Gradient: Spatial Aspects of Fiscal Competition," American Economic Journal: Economic Policy, American Economic Association, vol. 7(2), pages 1-29, May.
    4. repec:eee:regeco:v:70:y:2018:i:c:p:373-383 is not listed on IDEAS
    5. Saxon, Nicholas & Tosun, Mehmet S. & Yang, Jingjing, 2015. "State and Local Sales Taxes and Business Activity in the United States," IZA Discussion Papers 9413, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    commodity taxation; local public finance; fiscal federalism; spatial tax competition; tax systems; municipal autonomy;

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • R50 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - General

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