LC Posted May 20, 2019 Share Posted May 20, 2019 https://www.journals.uchicago.edu/doi/abs/10.1086/701424 This paper investigates how tax changes for different income groups affect aggregate economic activity. I construct a measure of who received (or paid for) tax changes in the postwar period using tax return data from NBER’s TAXSIM. Variation in the income distribution across US states and federal tax changes generate variation in regional tax shocks that I exploit to test for heterogeneous effects. I find that the positive relationship between tax cuts and employment growth is largely driven by tax cuts for lower-income groups and that the effect of tax cuts for the top 10 percent on employment growth is small. Quote Link to comment Share on other sites More sharing options...
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