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Tax Cuts and Employment in New Jersey: Lessons From a Regional Analysis

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  • W. Robert Reed
  • Cynthia L. Rogers

Abstract

The Whitman administration’s 30% reduction in New Jersey’s personal income taxes from 1994 to 1996 is prominently cited as a role model for state fiscal policy. The authors investigate whether the growth benefits attributed to the Whitman tax cuts are warranted. Panel data methods are applied to annual observations of county-level employment growth fromNew Jersey and the surrounding economic region. This study’s analysis does not support the hypothesis that tax cuts stimulated employment growth in New Jersey. Although New Jersey did experience substantial employment growth subsequent to the tax cuts, most of this growth was shared by the nearby Economic Areas.

Suggested Citation

  • W. Robert Reed & Cynthia L. Rogers, 2004. "Tax Cuts and Employment in New Jersey: Lessons From a Regional Analysis," Public Finance Review, , vol. 32(3), pages 269-291, May.
    • Handle: RePEc:sae:pubfin:v:32:y:2004:i:3:p:269-291
    DOI: 10.1177/1091142104264488
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    Cited by:

    1. Christian Bjørnskov & Niklas Potrafke, 2013. "The size and scope of government in the US states: does party ideology matter?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(4), pages 687-714, August.
    2. Masud Alam, 2021. "Heterogeneous Responses to the U.S. Narrative Tax Changes: Evidence from the U.S. States," Papers 2107.13678, arXiv.org.
    3. W. Robert Reed & Cynthia L. Rogers, 2006. "Tax Burden and the Mismeasurement of State Tax Policy," Public Finance Review, , vol. 34(4), pages 404-426, July.
    4. Peter Bluestone & Carolyn Bourdeaux, 2019. "Dynamic Revenue Analysis: Experience of the States," Center for State and Local Finance Working Paper Series cslf1911, Andrew Young School of Policy Studies, Georgia State University.
    5. Zheng, Liping & Severe, Sean, 2016. "Teaching the macroeconomic effects of tax cuts with a quasi-experiment," Economic Analysis and Policy, Elsevier, vol. 51(C), pages 55-65.
    6. W. Robert Reed, 2021. "Reply to Brewer, Conway, and Rork (2021)," Public Finance Review, , vol. 49(3), pages 488-491, May.

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