This paper investigates how tax changes for different income groups affect aggregate economic activity. I construct a measure of who received (or paid for) tax changes in the postwar period using tax return data from NBER{\textquoteright}s TAXSIM. I aggregate each tax change by income group and state. Variation in the income distribution across U.S. states and federal tax changes generate variation in regional tax shocks that I exploit to test for heterogeneous effects. I find that the positive relationship between tax cuts and employment growth is largely driven by tax cuts for lower-income groups, and that the effect of tax cuts for the top 10\% on employment growth is small.
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}, year = {2019}, journal = {Journal of Political Economy}, volume = {127}, pages = {1437-1472}, url = {http://www.nber.org/papers/w21035}, language = {eng}, }