State corporate tax cuts do not strongly correlate with faster wage growth for typical workers: Change in state corporate tax rate (percentage points) and average annual change (%) in median wages, 1989–2007
| Corporate tax rate change | Median wage growth |
|---|---|
| -3.93 | 0.6% |
| -2.72 | 0.4% |
| -1.10 | 0.7% |
| -0.62 | 0.6% |
| -0.30 | 1.0% |
| 0.00 | 0.7% |
| 0.25 | 0.7% |
| 0.35 | 0.5% |
| 0.50 | 0.8% |
| 0.82 | 0.6% |
| 1.42 | 0.7% |
| 3.63 | 0.4% |
Notes: Figure is a binned scatterplot that ranks state changes in corporate income taxes between 1989 and 2007 by state, and then groups them into similarly sized “bins” of observations. If data allow for an exactly equal number of observations in each bin, then bins are equally sized. If data are unequal, the number of observations in each bin is constructed using default settings on Stata binscatter command. Each bin’s average change in corporate income tax rates and median wages is then compared in the graph. Alaska and D.C. are excluded.
Sources: Data on state corporate tax rates taken from the replication file to Serrato and Zidar 2016. Median wage data from EPI analysis of Community Population Survey microdata.