Title: The unequal geographic burden of federal taxation
First published: 2008
Description: "In the United States, workers in cities offering above-average nominal wages -- cities with high productivity, low quality-of-life, or inefficient housing sectors -- pay 30 percent more in federal taxes than otherwise identical workers in cities offering below-average wages.  According to simulation results, federal taxes lower long-run employment levels in high-wage areas by 15 percent and land and housing prices by 25 and 4 percent, leading to locational inefficiencies costing 0.28 percent of income, or $34 billion in 2005.  Indexing taxes to local wage-levels eliminates these locational inefficiencies.  Tax deductions index taxes partially to local cost-of-living and improve locational efficiency"--National Bureau of Economic Research web site.
LC classification: HB1