Despite a recent flurry of empirical research on the effects of taxes on small business activity, state-level taxes faced by entrepreneurs have been overlooked by most of the existing literature. Using a 50-state panel of tax policy information spanning the years 1989 through 2002, our analysis reveals that state tax policies generally do not appear to have quantitatively important effects on entrepreneurial activity. When we find statistically important effects, we find that higher individual income tax rates, the existence of a state-level estate, inheritance or gift tax, and a higher weight on the sales factor in the state corporate income tax apportionment formula all slightly reduce a state's share of the national entrepreneurial stock. Results also indicate that states with more progressive personal income tax structures and states that have more aggressive corporate income taxes through the imposition of a combined reporting requirement both tend to have slightly higher entrepreneurship rates. The composition of state tax portfolios is not found to be a significant determinant of state entrepreneurship.

Do states engage in infrastructure expenditure competition to attract new economic activity? Economic theory is inconclusive on the matter. States might respond to increased infrastructure spending in competitor states by increasing their own infrastructure spending. Conversely, states may decrease spending in the presence of positive spillovers from competitor states' infrastructure investment. Using spatial econometric techniques and focusing specifically on highway spending, we demonstrate that states expend less on highways when spending in neighboring states increases. We explore this possibility further by modeling state personal income growth as a function of own-state and neighborstate highway spending. Our findings suggest positive spillovers influence interstate relationships for highway spending rather than race-to-the-top competition for economic activity.

Bruce D., Deskins J. A., Hill B. C. and Rork J. C. (Small) business activity and state economic growth: does size matter?, Regional Studies. Using a 1988-2002 panel of US state-level data, the impact of small and large business activity on gross state product (GSP), state personal income (SPI), and total state employment was examined. Business activity measures include annual counts of firms, establishments, and employees, the dollar value of payroll expenses, and annual births and deaths of establishments. The paper accounts for the simultaneity of business activity and overall growth, other determinants of economic growth, and spatial influences of small business activity. It is found that overall economic growth is faster when the net birth rate of new small firm establishments is positive. [image omitted] Bruce D., Deskins J. A., Hill B. C. et Rork J. C. Activite des (petites) entreprises et croissance economique de l'Etat: l'importance de la taille, Regional Studies. S'appuyant sur une serie de donnees au niveau des Etats-Unis pour la periode 1988-2002, nous examinons les consequences de l'activite des petites et grandes entreprises sur le produit brut de l'Etat (GSP), sur le revenu personnel par tete (SPI) et sur l'emploi total de l'Etat. Les mesures de l'activite des entreprises portent sur les comptes annuels des entreprises, des etablissements et du personnel, la valeur en dollar des depenses de personnel ainsi que sur les naissances et les deces annuels dans les etablissements. Nous tenons compte de la simultaneite de l'activite des entreprises et de la croissance globale, d'autres determinants de la croissance economique et des influences sur l'espace de l'activite des petites entreprises. Nous constatons que la croissance economique globale est plus rapide lorsque le taux des naissances des petites entreprises nouvelles est positif. Petites entreprises Entreprenariat Croissance economique Bruce D., Deskins J. A., Hill B. C. und Rork J. C. Aktivitaten von (Klein-)Unternehmen und Wirtschaftswachstum im Staat: Kommt es auf die Grosse an?, Regional Studies. Anhand eines Panels mit Daten auf der Ebene der US-Bundesstaaten im Zeitraum von 1988 bis 2002 untersuchen wir die Auswirkung der Aktivitaten von Klein- und Grossunternehmen auf das Bruttostaatsprodukt, das personliche Einkommen im Staat und das Gesamtbeschaftigungsniveau im Staat. Zu den Massstaben fur die Unternehmensaktivitat gehoren jahrliche Zahlungen von Firmen, Einrichtungen und Mitarbeitern, der Dollarwert der Lohnaufwendungen sowie die jahrliche Anzahl an Firmengrundungen und Firmenschliessungen. Wir berucksichtigen die Gleichzeitigkeit von Geschaftsaktivitaten und Gesamtwachstum sowie weitere Determinanten des Wirtschaftswachstums und raumliche Einflusse auf die Aktivitat von Kleinunternehmen. Wir stellen fest, dass sich das generelle Wirtschaftswachstum beschleunigt, wenn die Nettorate der Grundungen von neuen Kleinbetrieben positiv ausfallt. Kleinunternehmen Unternehmertum Wirtschaftswachstum Bruce D., Deskins J. A., Hill B. C. y Rork J. C....

Our focus in this essay is on the extent to which tax planning in response to variations in state tax policy has affected state corporate income tax bases and revenues. Tax planning is defined as a broad set of actions undertaken by firms to reduce their tax liability. Financial or accounting tax planning is contrasted with what we refer to as locational distortions, in which firms move physical operations to avoid higher tax liabilities. Results from a fixed effects instrumental variables regression model using a 1985-2001 panel of state-level data provide highly suggestive evidence that tax planning activity significantly diminishes taxable corporate profits in high tax states. Specifically, we find that state corporate income tax bases decline by nearly 7 percent following a onepercentage-point increase in the top marginal corporate income tax rate, controlling for locational distortions. We also find that throwback rules are usually ineffective in restoring corporate income tax bases while combined reporting requirements are often effective. Further analysis indicates that tax planning has not diminished the locational distortions of tax policy.

H2, H7,