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Fiscal zoning and sales taxes: do higher sales taxes lead to more retailing and less manufacturing?

Burnes, Daria, White, Michelle J. and Neumark, David (2011) Fiscal zoning and sales taxes: do higher sales taxes lead to more retailing and less manufacturing? Public Economics Programme Papers (PEP 12). Suntory and Toyota International Centres for Economics and Related Disciplines, London, UK.

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Abstract

We test the hypothesis that local government officials in jurisdictions that have higher local sales taxes are more likely to use fiscal zoning to encourage retailing. We find that total retail employment is not significantly affected by local sales tax rates, but employment in big box and anchor stores is higher significantly in jurisdictions with higher sales tax rates. This suggests that local officials in jurisdictions with higher sales taxes concentrate on attracting large stores and shopping centers. We also find that the effect of local sales taxes on big box and anchor store retail employment is larger in county interiors, where residents tend to be captive to local retailers. Finally, fiscal zoning has the opposite effect on manufacturing employment, suggesting that local officials’ efforts to attract shopping centers and large stores crowd out manufacturing.

Item Type: Monograph (Report)
Official URL: http://sticerd.lse.ac.uk/
Additional Information: © 2011 The Authors
Divisions: STICERD
Subjects: H Social Sciences > HB Economic Theory
Sets: Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
Date Deposited: 22 Jul 2014 09:20
Last Modified: 19 May 2020 23:19
Funders: Cheung Kong Graduate School of Business, Beijing, for hospitality
URI: http://eprints.lse.ac.uk/id/eprint/58081

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