The Structure of State Corporate Taxation and its Impact on State Tax Revenues and Economic Activity
This paper documents facts about the state corporate tax structure | tax rates, base rules, and credits | and investigates its consequences for state tax revenue and economic activity. We present three main findings. First, tax base rules and credits explain more of the variation in state corporate tax revenues than tax rates do. Second, although states typically do not offset tax rate changes with base and credit changes, the effects of tax rate changes on tax revenue and economic activity depend on the breadth of the base. Third, as states have narrowed their tax bases, the relationship between tax rates and tax revenues has diminished. Overall, changes in state tax bases have made the state corporate tax system more favorable for corporations and are reducing the extent to which tax rate increases raise corporate tax revenue.
-
-
Copy CitationJuan Carlos Suárez Serrato and Owen M. Zidar, "The Structure of State Corporate Taxation and its Impact on State Tax Revenues and Economic Activity," NBER Working Paper 23653 (2017), https://doi.org/10.3386/w23653.Download Citation
-
Published Versions
Juan Carlos Suárez Serrato & Owen Zidar, 2018. "The structure of state corporate taxation and its impact on state tax revenues and economic activity," Journal of Public Economics, vol 167, pages 158-176. citation courtesy of 
Related
Mentioned in the News
More from the NBER
In addition to working papers, the NBER disseminates affiliates’ latest findings through a range of free periodicals—the NBER Reporter, the NBER Digest, the Bulletin on Health, the Bulletin on the Economics of Alzheimer's, and the Bulletin on Entrepreneurship—as well as research spotlights, lectures, and panel videos.
