Figure A
Cutting corporate tax rates is not associated with gains in median wages: Percentage-point change in state corporate income tax rate and annualized growth in median wages, 1980–2010
| Corporate rate | Median wage | Population (weight) |
|---|---|---|
| 1.5% | 0.4% | 4.80E+06 |
| 0.0% | -1.0% | 710231 |
| -3.5% | 0.2% | 6.30E+06 |
| 0.5% | 0.5% | 2.90E+06 |
| -0.8% | 0.2% | 3.70E+07 |
| -0.4% | 0.4% | 5.00E+06 |
| -2.5% | 0.8% | 3.60E+06 |
| 0.0% | 0.7% | 897934 |
| 0.5% | 0.7% | 1.90E+07 |
| 0.0% | 0.7% | 9.70E+06 |
| 0.0% | 0.2% | 1.40E+06 |
| 1.1% | 0.1% | 1.60E+06 |
| 0.8% | -0.1% | 1.30E+07 |
| 2.5% | 0.1% | 6.50E+06 |
| 2.0% | 0.2% | 3.00E+06 |
| 0.3% | 0.3% | 2.90E+06 |
| 0.0% | 0.3% | 4.30E+06 |
| 0.0% | 0.1% | 4.50E+06 |
| 2.0% | 0.8% | 1.30E+06 |
| 0.0% | 0.5% | 5.80E+06 |
| -0.8% | 0.9% | 6.50E+06 |
| 2.6% | -0.2% | 9.90E+06 |
| -2.2% | 0.5% | 5.30E+06 |
| 1.0% | 0.4% | 3.00E+06 |
| 1.3% | 0.3% | 6.00E+06 |
| 0.3% | 0.1% | 989415 |
| 3.3% | 0.4% | 1.80E+06 |
| 0.0% | 0.0% | 2.70E+06 |
| 0.5% | 0.9% | 1.30E+06 |
| 0.0% | 0.7% | 8.80E+06 |
| 2.6% | 0.3% | 2.10E+06 |
| -2.9% | 0.5% | 1.90E+07 |
| 0.9% | 0.6% | 9.50E+06 |
| -2.1% | 0.5% | 672591 |
| -8.0% | -0.1% | 1.20E+07 |
| 2.0% | 0.2% | 3.80E+06 |
| -0.5% | -0.1% | 3.80E+06 |
| 0.5% | 0.3% | 1.30E+07 |
| 1.0% | 0.8% | 1.10E+06 |
| -1.0% | 0.6% | 4.60E+06 |
| 0.0% | 0.6% | 814180 |
| 0.0% | 0.3% | 6.30E+06 |
| 0.0% | 0.1% | 2.50E+07 |
| 1.0% | 0.1% | 2.80E+06 |
| 1.0% | 0.8% | 625741 |
| 0.0% | 0.7% | 8.00E+06 |
| 0.0% | 0.1% | 6.70E+06 |
| 2.5% | 0.2% | 1.90E+06 |
| 0.0% | 0.2% | 5.70E+06 |
| 0.0% | 0.0% | 563626 |
Note: Author’s analysis of data on state corporate tax rates from Serrato and Zidar (summary data here). Data on state median wages from the Current Population Survey Outgoing Rotation Groups (ORG). Data is deflated using the CPI-U-RS. Data points weighted by state population in 2010.
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