Enrico Moretti, UC Berkeley
CCPR Seminar Room 4240 Public Affairs Building, Los Angeles"The Effect of State Taxes on the Geographical Location of
Top Earners: Evidence from Star Scientists "
Co-sponsored with the Department of Economics
ABSTRACT
In the U.S., personal and business taxes vary enormously from state to state. While these differences have the potential to affect the geographical location of highly skilled workers and employers across the country, evidence on their effects is limited. We uncover large, stable, and precisely estimated effects of personal and corporate taxes on star scientists’ migration patterns. The long run elasticity of mobility relative to taxes is 1.8 for personal income taxes and 1.9 for state corporate income tax. While there are other factors that drive when innovative individual and innovative companies decide to locate, there are enough firms and workers on the
margin that state taxes matter.