LSE LSE Research Laboratory LSE
LSE Research Laboratory (RLAB)

Abstract for:

FISCAL ZONING AND SALES TAXES: DO HIGHER SALES TAXES LEAD TO MORE RETAILING AND LESS MANUFACTURING?

Daria  Burnes,  David  Neumark,  Michelle J.  White,  June 2011
Paper No' PEP 12: | Full paper (pdf)
Save Reference as: BibTeX BibTeX File | Endote EndNote Import File
Keywords:

JEL Classification:

Is hard copy/paper copy available? YES - Paper Copy Still In Print.
This Paper is published under the following series: Public Economics Programme Discussion Papers
Share this page: Google Bookmarks Google Bookmarks | Facebook Facebook | Twitter Twitter

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.