AEA Papers and Proceedings
ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)
Who Benefits from State Corporate Tax Cuts? A Local Labor Market Approach with Heterogeneous Firms: Further Results
AEA Papers and Proceedings
vol. 114,
May 2024
(pp. 358–63)
Abstract
This paper estimates state corporate tax incidence using new data and methods for estimating the effects on profits. Extending Suárez Serrato and Zidar (2016), we develop two identification approaches that use the effects on incumbent firm labor demand and local productivity. We estimate these effects using data from census, show how they identify parameters, and provide incidence estimates using reduced-form and structural approaches. Across these approaches, we find that owners bear a substantial portion of incidence. Our central estimate is that firm owners bear half of the incidence, while workers and landowners bear 25–40 percent and 10–15 percent, respectively.Citation
Suárez Serrato, Juan Carlos, and Owen Zidar. 2024. "Who Benefits from State Corporate Tax Cuts? A Local Labor Market Approach with Heterogeneous Firms: Further Results." AEA Papers and Proceedings, 114: 358–63. DOI: 10.1257/pandp.20241097Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- H22 Taxation and Subsidies: Incidence
- H25 Business Taxes and Subsidies including sales and value-added (VAT)
- H71 State and Local Taxation, Subsidies, and Revenue
- J23 Labor Demand
- L25 Firm Performance: Size, Diversification, and Scope
- R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics