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Title: State Income Taxes and Residential Location in Multi-State Metropolitan Areas

Citation Type: Miscellaneous

Publication Year: 2009

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Abstract: We examine how differences in state income tax rates, as well as other state and local taxes and pub- lic service 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 twenty sample of the 2000 Census of Population and Housing microdata extracted from the Integrated Public 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 to live in one state and work in another state. After controlling for other factors believed to affect household location, we find that differences in state income tax rates have a statistically significant impact on the probability a household locates in the low tax state within an MSA.

Url: https://pdfs.semanticscholar.org/3da7/cae17807cce4678f8687bb56d91779ba526f.pdf

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Authors: Sanford, Ken; Hoyt, William

Publisher: Gatton College of Business and Economics

Data Collections: IPUMS USA

Topics: Housing and Segregation

Countries: United States