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Title: State Income Taxes in Interstate Metropolitan Ares: The Choice of Where to Work and Where to Live for Movers

Citation Type: Working Paper

Publication Year: 2010

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Abstract: We examine how differences in state income tax rates, as well as other state and local taxes and publicservice expenditures, influence the choice of state of residence for households (federal tax filers)moving into multistate metropolitan statistical areas (MSA) using data from the one in twentysample of the 2000 Census of Population and Housing microdata extracted from the IntegratedPublic Use Microdata Series (IPUMS). MSAs that are on borders provide a spatial discontinuity discrete differences in state tax rates within a single labor market. These MSAs allow residents tolive in one state and work in another state. After controlling for other factors believed to affecthousehold location, we find that differences in state income tax rates have a statistically significantimpact on the probability a household locates in the low tax state within an MSA.

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Authors: Coomes, Paul A.; Sanford, Kenneth P.; Hoyt, William H.

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Publisher Location: Lexington, KY

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure, Migration and Immigration

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