The Influence of Taxes on Employment and Population Growth: Evidence from the Washington, D.C. Metropolitan Area
Posted: 19 Apr 2000
We examine whether personal and business taxes are an important determinant of economic development in a metropolitan area. We estimate determinants of the location of private employment and populations across the D.C. metropolitan area over the period 1969-94. After controlling for jurisdiction and time effects, we find that higher rates of two business taxes ? sales and personal property ? reduce annual employment growth by a significant amount. Higher levels of nonwelfare public service expenditures are estimated to increase employment growth. We do not find local property taxes to be a significant factor.
JEL Classification: H20
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