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State Taxes (Fajgelbaum et al.)

State Taxes and spatial misallocation by Pablo D. Fajgelbaum, Eduardo Morales, Juan Carlos S. Serrato and Owen Zidar published by The Review of Economic Studies (12019). “We study state taxes as a potential source of spatial misallocation in the U.S.. We build a spatial general equilibrium framework that incorporates salient features of the U.S. state tax system, and use changes in state tax rates between 1980 and 2010 t0 estimate the model parameters that determine how worker and firm location respond to changes in state taxes…”

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