LOST in America: Evidence on local sales taxes from national panel data

Agrawal, David R.

doi:10.1016/j.regsciurbeco.2014.09.006

Cited by 31 publications

(13 citation statements)

References 48 publications

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“…Table A.1 provides summary statistics by state. For an even more detailed institutional background, please see Agrawal (2013).…”

Section: B Supplementary Appendix: Data B1 Background On the Local Omentioning

confidence: 99%

The Tax Gradient: Spatial Aspects of Fiscal Competition

Agrawal

2015

American Economic Journal: Economic Policy

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. State borders create a discontinuous tax treatment of retail sales. In a Nash game, local tax rates will be higher on the low-state-tax side of a border. Local taxes will decrease from the nearest high-tax border and increase from the low-tax border. Using driving time from state borders and all local sales tax rates, local tax rates on the low-tax side of the border are 1.25 percentage points higher, reducing the differential in state tax rates by over three-quarters. A ten minute increase in driving time from the nearest high-tax state lowers a border town's local tax rate by 6%. Terms of use: Documents in EconStor mayJEL-Code: H200, H250, H730, H770, R510.

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“…Table A.1 provides summary statistics by state. For an even more detailed institutional background, please see Agrawal (2013).…”

Section: B Supplementary Appendix: Data B1 Background On the Local Omentioning

confidence: 99%

The Tax Gradient: Spatial Aspects of Fiscal Competition

Agrawal

2015

American Economic Journal: Economic Policy

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“…We thank an anonymous referee for pointing this out.4 Agrawal (2014Agrawal ( , 2015 has recently compiled nationwide LOST tax rate data for a 10-year period. The advantage of our 45-year panel is that it reports initial adoptions as well as annual tax revenues.…”

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confidence: 99%

Leaders, Followers, and Asymmetric Local Tax Policy Diffusion

Burge

Rogers

2016

Journal of Regional Science

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Complementing recent theoretical models of tax competition with endogenous leadership, we empirically model local policy diffusion as a dynamic asymmetric process. Using a setting where local option sales taxes rapidly transitioned from nonexistence to ubiquity, we construct a policy leadership index to classify jurisdictions as leaders or followers. Using models that control for vertical tax competition effects, we show how asymmetric leader–follower dynamics characterize horizontal tax competition over the three decades that follow. A placebo test further supports our main conclusions. This methodological approach could be adapted to other settings where policies exhibit both extensive and intensive margins.

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“…We assemble a database, described in more detail in Appendix A.2, of all local use taxes in the United States that is similar to local sales tax data assembled in Agrawal (2014). The data have complete geographic coverage of states, towns, counties, and special taxing districts in the United States including Alaska, Hawaii, and the District of Columbia.…”

Section: Tax Rate Datamentioning

confidence: 99%

“…Although these data are provided to firms, they need substantial cleaning to be used for research purposes. The panel data are assembled in a similar manner as the sales tax data in Agrawal (2014).…”

Section: A2 Data Cleaningmentioning

confidence: 99%

Will destination-based taxes be fully exploited when available? An application to the U.S. commodity tax system

Agrawal

Mardan

2019

Journal of Public Economics

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We develop a tax competition model that allows for the setting of both an origin-based and a destination-based commodity tax rate in the presence of avoidance and evasion. In the presence of evasion, jurisdictions will give cross-border shoppers tax preferential treatment, thus not fully exploiting the potential of destination-based taxation. Moreover, the divergence between originbased and destination-based taxes is stronger when the incentives for consumers' tax-arbitrage opportunities increase. The United States is one example of many such systems. While sales taxes are due at the point of sale, use taxes are due on goods purchased out-of-state. We document that when able to set both rates, a majority of jurisdictions levy destination-based use taxes at a lower rate than origin-based sales taxes. In response to changes in state-level policies that increase tax avoidance opportunities, the results of the empirical model broadly confirm our theory.

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LOST in America: Evidence on local sales taxes from national panel data

Cited by 31 publications

References 48 publications

The Tax Gradient: Spatial Aspects of Fiscal Competition

The Tax Gradient: Spatial Aspects of Fiscal Competition

Leaders, Followers, and Asymmetric Local Tax Policy Diffusion

Will destination-based taxes be fully exploited when available? An application to the U.S. commodity tax system

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