Date of this Version

11-2-2015

Document Type

Working Paper

Abstract

This paper analyzes the effects of state-level personal tax rates on state tax revenue and individual welfare. The policy analysis based on a general equilibrium model suggests that tax revenues would bene.t from higher wage-income, sales or property taxes, while any in- crease in dividend-income tax would result in a reduction of revenues. It is also shown that individuals would su.er from an increase in state-level wage-income tax, dividend-tax or sales tax, while they would bene.t from an increase in property taxes. The heterogeneity across states is determined by a TaxIndex, a weighted average of initial taxes at the state level.

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