Comment on Richardson: Progressive Federal Taxation Drives Redistribution from Blue to Red States
In: The Economists' Voice, October 2010, 7(4): Article 5
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In: The Economists' Voice, October 2010, 7(4): Article 5
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In: Southern Economic Journal, Band 77, Heft 2
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In: FRB of Dallas Working Paper No. 2112
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Local and state governments attempt to lessen after-tax income inequality via progressive taxation. Migration responses of capital and labor undermine such attempts. Location theory predicts that cross-state migration will continue until the redistributive effects from taxation are fully capitalized into gross wages leaving after-tax wages unchanged. Empirical evidence has not reached a consensus on this issue. At one extreme, Feldstein and Wrobel (1998) report evidence of full tax capitalization for US states. At the other extreme, Leigh (2008) reports very little to no wage capitalization. We revisit this question by creating a pseudo panel from CPS data spanning years 1997 to 2015. Our "best" estimate is that pre-tax wages adjust in response to redistributive state and local taxes, negating roughly 50 percent of effect compared to counterfactual with no behavioral responses.
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In: JEDC-D-22-00150
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In: Tax Notes, Vol. 138, No. 8, February 25, 2013
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Working paper
In: National Tax Journal, December 2012, Vol. 65 Issue 4, p. 1069
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In: Journal of labor research, Band 32, Heft 3, S. 237-253
ISSN: 1936-4768
In: Journal of Housing Economics, Band 20, Heft 2
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In: Journal of Labor Research Vol. 32, No. 3
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In: IZA Discussion Paper No. 6798
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In: MERCATUS WORKING PAPER
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Working paper
In: Journal of Economic Literature, Band 50, Heft 1
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In: NBER Working Paper No. w15012
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