THE EFFECTS OF LOCAL TAXES AND SPENDING ON BUSINESS STARTUPS

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This paper examines the effects of local taxes and government spending on new business startups in 8,576 Maine city-industries between 1993 and 1994. Empirical findings indicate that local property tax rates have a negative effect on the number of startups, whereas spending on education and total local government spending on public services have a positive effect on new business activity.

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