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Do Redistributive State Taxes Reduce inequality?

Leigh, Andrew

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Do income taxes levied at a state or regional level affect the after-tax distribution of income? Or do workers merely move between regions, causing pre-tax wages to adjust? Using the full income tax parameters for all U.S. states from 1977-2002,I create a "simulated tax redistribution index" that captures the mechanical impact of changes in tax policy on the Gini coefficient, but is exogenous to any behavioral response. Analyzing the effect of this redistribution index on inequality, I find...[Show more]

dc.contributor.authorLeigh, Andrew
dc.date.accessioned2015-12-08T22:18:18Z
dc.identifier.issn0028-0283
dc.identifier.urihttp://hdl.handle.net/1885/31283
dc.description.abstractDo income taxes levied at a state or regional level affect the after-tax distribution of income? Or do workers merely move between regions, causing pre-tax wages to adjust? Using the full income tax parameters for all U.S. states from 1977-2002,I create a "simulated tax redistribution index" that captures the mechanical impact of changes in tax policy on the Gini coefficient, but is exogenous to any behavioral response. Analyzing the effect of this redistribution index on inequality, I find that gross wages do not adjust so as to undo the effect of changes in state income taxes. On aggregate, more redistributive state taxes do not substantially affect interstate migration, nor do they reduce per-capita state personal income.
dc.publisherNational Tax Association
dc.sourceNational Tax Journal
dc.titleDo Redistributive State Taxes Reduce inequality?
dc.typeJournal article
local.description.notesImported from ARIES
local.identifier.citationvolumeLXI
dc.date.issued2008
local.identifier.absfor140215 - Public Economics- Taxation and Revenue
local.identifier.ariespublicationu8410019xPUB81
local.type.statusPublished Version
local.contributor.affiliationLeigh, Andrew, College of Business and Economics, ANU
local.description.embargo2037-12-31
local.bibliographicCitation.issue1
local.bibliographicCitation.startpage81
local.bibliographicCitation.lastpage104
dc.date.updated2015-12-08T08:15:17Z
local.identifier.scopusID2-s2.0-43949138903
CollectionsANU Research Publications

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