Who Benefits from State Corporate Tax Cuts? A Local Labor Markets Approach with Heterogeneous Firms: Comment
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Mots-clés
Incidence Corporate income tax Discrete/continuous choice H - Public Economics/H.H2 - Taxation, Subsidies, and Revenue/H.H2.H22 - Incidence H - Public Economics/H.H2 - Taxation, Subsidies, and Revenue/H.H2.H25 - Business Taxes and Subsidies H - Public Economics/H.H3 - Fiscal Policies and Behavior of Economic Agents/H.H3.H32 - Firm H - Public Economics/H.H7 - State and Local Government • Intergovernmental Relations/H.H7.H71 - State and Local Taxation, Subsidies, and Revenue R - Urban, Rural, Regional, Real Estate, and Transportation Economics/R.R5 - Regional Government Analysis/R.R5.R51 - Finance in Urban and Rural Economies R - Urban, Rural, Regional, Real Estate, and Transportation Economics/R.R2 - Household Analysis/R.R2.R23 - Regional Migration • Regional Labor Markets • Population • Neighborhood CharacteristicsSujets proches
Grants Subventions Vouchers (Subsidies) Corporate subsidies Welfare, Corporate Government subsidies Business subsidies Corporate welfare Government aid Federal aidCiter ce document
Clément Malgouyres et al., « Who Benefits from State Corporate Tax Cuts? A Local Labor Markets Approach with Heterogeneous Firms: Comment », Archive ouverte de Sciences Po (SPIRE), ID : 10670/1.ea4w17
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Résumé
Suárez Serrato and Zidar (2016) identify state corporate tax incidence in a spatial equilibrium model with imperfectly mobile firms. Their identification argument rests on comparative-statics omitting a channel implied by their model: the link between common determinants of a location’s attractiveness and the average idiosyncratic productivity of firms choosing that location. This compositional margin causes the labor demand elasticity to be independent from the product demand elasticity, impeding the identification of incidence from the four estimated reduced-form effects. Assigning consensual values to the unidentified parameters, we find that the incidence share born by firm-owners is closer to 25% than 40%.