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Tax Cuts and Employment Growth in New Jersey: Lessons From a Regional Analysis

Author

Listed:
  • W. Robert Reed

    (University of Oklahoma)

  • Cynthia L. Rogers

    (University of Oklahoma)

Abstract

The Whitman Administration’s 30 percent reduction in New Jersey’s personal income taxes from 1994-96 is prominently cited as a role model for state fiscal policy. We investigate whether the growth benefits attributed to the Whitman tax cuts are warranted. Panel data methods are applied to annual observations of county-level employment growth from New Jersey and the surrounding economic region. Our analysis does not support the hypothesis that tax cuts stimulated employment growth in New Jersey. While New Jersey did experience substantial employment growth subsequent to the tax cuts, most of this growth was shared by the nearby Economic Areas.

Suggested Citation

  • W. Robert Reed & Cynthia L. Rogers, 2005. "Tax Cuts and Employment Growth in New Jersey: Lessons From a Regional Analysis," Urban/Regional 0506010, EconWPA.
  • Handle: RePEc:wpa:wuwpur:0506010
    Note: Type of Document - pdf; pages: 29. This paper was published in Public Finance Review, Vol. 32, No. 3 (2004): 269-291.
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    File URL: http://econwpa.repec.org/eps/urb/papers/0506/0506010.pdf
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    References listed on IDEAS

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    8. Mofidi, Alaeddin & Stone, Joe A, 1990. "Do State and Local Taxes Affect Economic Growth?," The Review of Economics and Statistics, MIT Press, vol. 72(4), pages 686-691, November.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Paul Ryan wants to cut income taxes. Bobby Jindal wants to kill them dead.
      by Dylan Matthews in Ezra Klein's Wonkblog on 2013-03-20 21:30:26

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    Cited by:

    1. Christian Bjørnskov & Niklas Potrafke, 2013. "The size and scope of government in the US states: does party ideology matter?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(4), pages 687-714, August.

    More about this item

    Keywords

    Tax cuts; economics growth;

    JEL classification:

    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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