This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. American Economic Review
  4. December 2023
  5. Who Benefits from State Corporate Tax Cuts? A Local Labor Market Approach with Heterogeneous Firms: Reply

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Who Benefits from State Corporate Tax Cuts? A Local Labor Market Approach with Heterogeneous Firms: Reply

  • Juan Carlos Suárez Serrato
  • Owen Zidar
American Economic Review
vol. 113, no. 12, December 2023
(pp. 3401–10)
See also: Comment by Malgouyres, Mayer, and Mazet-Sonilhac (2023)
See also: Original paper by Suárez Serrato and Zidar (2016)

 

Download Full Text PDF

Abstract

In Suárez Serrato and Zidar (2016), we estimate the incidence of state corporate taxes. Malgouyres, Mayer, and Mazet-Sonilhac (2023) highlight two errors, ignoring effects on firm composition and characterizing capital costs inconsistently. This reply corrects the structural model and corresponding incidence estimates. The incidence results are similar to the originally reported estimates and the confidence intervals widen for some estimates. In the corrected structural model, the firm owner incidence share estimate changes by 1.6 percentage points relative to the original version (i.e., 38.1 percent versus 36.5 percent). The worker share estimate is 35.0 percent. Landowners bear the remaining 26.8 percent.

Citation

Suárez Serrato, Juan Carlos, and Owen Zidar. 2023. "Who Benefits from State Corporate Tax Cuts? A Local Labor Market Approach with Heterogeneous Firms: Reply." American Economic Review, 113 (12): 3401–10. DOI: 10.1257/aer.20230208

Additional Materials

JEL Classification

  • H22 Taxation and Subsidies: Incidence
  • H25 Business Taxes and Subsidies including sales and value-added (VAT)
  • H32 Fiscal Policies and Behavior of Economic Agents: Firm
  • H71 State and Local Taxation, Subsidies, and Revenue
  • R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
  • R51 Finance in Urban and Rural Economies