TY  - JOUR
AU  - Felix,R. Alison
AU  - Hines,James R., Jr.
TI  - Corporate Taxes and Union Wages in the United States
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15263
PY  - 2009
Y2  - August 2009
UR  - http://www.nber.org/papers/w15263
L1  - http://www.nber.org/papers/w15263.pdf
N1  - Author contact info:
R. Alison Felix
Federal Reserve Bank of Kansas City
1 Memorial Drive
Kansas City, MO  64198-0001
E-Mail: alison.felix@kc.frb.org

James R. Hines
Department of Economics
University of Michigan
343 Lorch Hall
611 Tappan Street
Ann Arbor, MI  48109-1220
Tel: 734/764-2320
Fax: 734/764-2769
E-Mail: jrhines@umich.edu
AB  - This paper evaluates the effect of U.S. state corporate income taxes on union wages.  American workers who belong to unions are paid more than their non-union counterparts, and this difference is greater in low-tax locations, reflecting that unions and employers share tax savings associated with low tax rates.  In 2000 the difference between average union and non-union hourly wages was $1.88 greater in states with corporate tax rates below four percent than in states with tax rates of nine percent and above.  Controlling for observable worker characteristics, a one percent lower state tax rate is associated with a 0.36 percent higher union wage premium, suggesting that workers in a fully unionized firm capture roughly 54 percent of the benefits of low tax rates.
ER  -