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Section 529 college savings plans are tax-favored investment vehicles, which saw tremendous growth after the Economic Growth and Tax Relief Reconciliation Act of 2001 expanded 529 plan benefits to include tax-free distributions for qualified higher education expenses. However, regulators, the press, and fund advisors criticized the Section 529 college savings plan industry for inadequate and nonuniform disclosures of investor information, such as historical returns, fees, taxes, and underlying investments. We investigate consumers’ investment choices after a disclosure regime change in 2003 and find that after enhanced disclosures became widely available, investors selected fewer plans offered exclusively through brokers, increasingly chose portfolios based on past investment performance, but remained unresponsive to state tax benefit disclosures. We also analyze the plans’ performance and find evidence that 529 investors are constrained to invest in portfolios with high, return-eroding fees. Nearly 20 percent of the portfolios have a statistically significant negative alpha, the measure of risk-adjusted excess return, while less than 1 percent have a statistically significant positive alpha.

We examine whether variations in the most fundamental aspects of state corporate income tax regimes affect state economic activity as measured by personal income, gross state product, and total non-farm employment. We focus on a variety of statutory components of state corporate income taxes that apply broadly in most U.S. states and for most multi-state corporate taxpayers. Our econometric strategy consists of a series of fixed effects panel regressions using state-level data from 1996 through 2010. Our results reveal important interaction effects of tax rates and policies, suggesting that policy makers should avoid making decisions about tax rates in isolation. The results demonstrate a relatively consistent negative economic response to the combination of high tax rates with throwback rules and heavy sales factor weights. Combined reporting has no discernible effect on personal income, GSP, or employment after controlling for tax rates, apportionment, and throwback rules. In an effort to gauge the relative impacts of tax policies on the location of economic activity, we also estimate alternative models in which each state’s economic activity is measured as a share of the national economic activity in each year. Statistically significant effects for tax rates, apportionment formulas, and throwback rules in the shares models suggest that at least some of their impact involves the movement of activity across state lines, thereby leaving open the possibility of a zero-sum game among the states.

The IT sector lost both workers and output following the dot‐com crash of 2000. Despite this loss of employment and earnings, information technology has become a more ubiquitous part of commerce and daily activities. This division between observed use of IT and industry growth is due both to the changing nature of IT investment towards emerging media and the changes in the structure of occupational deployment within firms. This paper describes the type and growth of emerging media with particular emphasis on growth of interactivity applications. This is followed by a description of occupational and skill shifts within traditional firms and the IT sector. We conclude that growth in emerging media occupations and skills represent a significant change in the labor force composition of both IT and traditional firms. The IT sector may be stagnant, but workers who deploy and employ IT related (primarily emerging media) applications is rising. Finally, we trace the value chain of emerging media and outline how it may affect the geography of new firm development.

When a small business purchases a capital asset, its cost for tax purposes is spread over the useful life of the asset through the process of depreciation. It has become common in the USA for policy makers to enhance depreciation rules in an effort to increase business investment in a less-costly manner than across-the-board marginal tax rate cuts. Indeed, short-term depreciation policies are often billed by policy makers as a way to save America's small businesses. However, little is known about the actual effects of depreciation policies on small business activity. This paper aims to discuss these issues.

In this initial attempt to test the political claims regarding the importance of depreciation rules, the paper uses a 12-year panel of tax returns for Schedule C sole proprietors to empirically examine whether more generous depreciation policies influence small business activity at the extensive margin. Specifically, the paper estimates a series of multivariate models to explain sole proprietors’ decisions to remain in business as functions of their financial, demographic, and tax situations, including measures of the present discounted value (PDV) of a stream of tax deductions for depreciated capital under various rule structures.

Throughout the analysis, the authors are unable to find evidence that favorable depreciation rules lead to greater rates of entrepreneurial longevity among Schedule C sole proprietors.

Discrete choice results suggest that increases in the PDV of tax reductions from depreciation (e.g. depreciating the value earlier in the recovery period) might actually lead to higher probabilities of small business exit, while survival analysis finds no clear influence of depreciation on spells of small business activity.