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Empirical Evidence on Municipal Tax Policy and Firm Growth

Charles Swenson

Charles Swenson 1

  1. Professor and Leventhal Research Fellow Marshall School of Business University of Southern California Los Angeles, CA USA 1

on Google Scholar
on PubMed

Pages: 1-13

DOI: 10.18488/journal.74/2016.3.1/

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Article History:

Received: 11 November, 2016
Revised: 09 December, 2016
Accepted: 29 November, 2016
Published: 07 January, 2017


There is relatively little research on whether city business tax structures either attract or repel business activity. Using very precise establishment-level data, the study examines the economic impacts of such taxes on all U.S. cities with populations over 40 thousand. Results indicate that activity-based city business taxes and sales taxes had statistically significant effects on the growths of business establishments and their related employment.
Contribution/ Originality
This is the first study to document overall business taxes paid by firms in U.S. cities. This is also the first study to show that higher levels of such city business taxes reduce employment and the number of establishments in U.S. cities.


Taxation, Employment, Establishments, City, Business, Policy.


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This study received no specific financial support.

Competing Interests:

The author declares that there are no conflicts of interests regarding the publication of this paper.


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