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How Major Local Taxes Affect Private Employment

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  • Yonghong Wu

Abstract

This empirical research focuses on three major local taxes—property tax, sales tax, and telecommunications tax—to examine their impacts on local economic development in the six-county Chicago metropolitan area. The statistical results indicate that these three major local taxes have significant negative effects on business employment. The study implies that it may be counterproductive for local governments to raise tax levels in order to address some immediate revenue shortfalls in the aftermath of the recent economic recession.

Suggested Citation

  • Yonghong Wu, 2012. "How Major Local Taxes Affect Private Employment," Economic Development Quarterly, , vol. 26(4), pages 351-360, November.
    • Handle: RePEc:sae:ecdequ:v:26:y:2012:i:4:p:351-360
    DOI: 10.1177/0891242412465109
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    References listed on IDEAS

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    1. Timothy J. Bartik, 1991. "Who Benefits from State and Local Economic Development Policies?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wbsle.
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    3. Mark, Stephen T. & McGuire, Therese J. & Papke, Leslie E., 2000. "The Influence of Taxes on Employment and Population Growth: Evidence From the Washington, D.C. Metropolitan Area," National Tax Journal, National Tax Association;National Tax Journal, vol. 53(1), pages 105-124, March.
    4. Mark, Stephen T. & McGuire, Therese J. & Papke, Leslie E., 2000. "The Influence of Taxes on Employment and Population Growth: Evidence from the Washington, D.C. Metropolitan Area," National Tax Journal, National Tax Association, vol. 53(n. 1), pages 105-24, March.
    5. Richard F. Dye & Therese J. McGuire & David F. Merriman, 2001. "The Impact of Property Taxes and Property Tax Classification on Business Activity in the Chicago Metropolitan Area," Journal of Regional Science, Wiley Blackwell, vol. 41(4), pages 757-777, November.
    6. Michael Wasylenko, 1997. "Taxation and economic development: the state of the economic literature," New England Economic Review, Federal Reserve Bank of Boston, issue Mar, pages 37-52.
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