The Impact of Corporate Tax Policy on State Trade Flows

State politicians are well aware of the importance of having a robust economy in order to be reelected. The economic vote is well documented in the literature and the intuition is naturally understood among politicians. Therefore, economic growth is of great importance to elected officials, especially executives, and most states have entire departments dedicated toward advancing economic development within their boundaries. This article review the literature and finds that business tax cuts are a direct approach to economic development, although current empirical research on this topic is mixed at the state level.

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