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on Public Economics |
| By: | Xincheng Qiu; Nicolo Russo |
| Abstract: | This paper examines income tax systems in over thirty countries over the past forty years using microdata from the Luxembourg Income Study. We show that income tax systems worldwide are well approximated by a two-parameter log-linear effective tax function. We provide country- and year-specific estimates and document several insights. First, higher average tax rates are associated with higher progressivity. Second, richer countries have more progressive tax systems. Third, progressivity varies by family structure, with marriage and children associated with higher progressivity. Finally, transfers play an important role in redistribution, making the overall tax-and-transfer function more progressive than the tax function. |
| Keywords: | Taxation, Income tax progressivity, Family structure |
| JEL: | E62 H20 H30 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26090 |
| By: | Laurent Bach; Antoine Bozio; Arthur Guillouzouic; Clément Malgouyres |
| Abstract: | We link French households' tax records to the corporations they control, and build a payout-policy-neutral income measure, with corresponding tax burdens including those of "billionaires": the top 0.0002%. Defined as such, income is more concentrated than taxable income, it better predicts rich-list membership, and persists more among billionaires. Personal taxes remain progressive until the top 0.1%, but eventually decline to 2% of income. Corporate taxes are an imperfect progressive backstop, as total tax rates fall from 45% at the 0.1% threshold to 25% for billionaires. Among these, the tax burden is global and tax-efficient pyramidal control over businesses is ubiquitous. |
| Keywords: | Income distribution, Tax progressivity, Business Income, Corporate tax |
| JEL: | E62 H25 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:2570 |
| By: | Tippet, Benjamin; Onaran, Özlem; Wildauer, Rafael |
| Abstract: | This paper analyses the revenue potential of a progressive annual net wealth tax in the UK. A progressive net wealth tax is a tax on the stock of net wealth that is designed to raise revenues primarily from the wealthiest individuals. We present a baseline progressive net wealth tax that only taxes the top 1% wealthiest individuals. Individuals with net wealth above £2.2 million (the top 1%) are taxed at a marginal rate of 1%; above £3.6 million (the top 0.5%) at a marginal rate of 2% and above £11.2 million (the top 0.1%) at a marginal rate of 4%. We estimate that in 2018-2020 this tax would have raised between £46 and 78 billion a year after administration costs. It would raise £46 billion if 50% of the tax is avoided, £69bn if 25% of the tax is avoided, and £78 billion if 15% of the tax is avoided. This is equivalent to roughly 8-12% of total tax revenues taken by the UK government in that year. This work updates a previous working paper from 2021. |
| Keywords: | wealth inequality; wealth tax; fiscal policy |
| Date: | 2024–06–03 |
| URL: | https://d.repec.org/n?u=RePEc:gpe:wpaper:47322 |
| By: | Jacopo Bassetto; Giuseppe Ippedico |
| Abstract: | We study how tax incentives affect the return migration of high-skilled expatriates to their home country, exploiting a generous income tax break for returnees in Italy. Using administrative data and a Triple-Difference design, we estimate a migration elasticity to the average net-of-tax rate just below one. Responses are sizable across the upper half of the earnings distribution, indicating that tax-induced migration is not limited to top earners. A cost-benefit analysis reveals that, while costly in the short term, the scheme pays for itself in present value if a sufficiently large fraction of returnees remains after the scheme elapses. |
| Keywords: | brain drain, tax incentives, return migration |
| JEL: | F22 H24 H31 J61 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26097 |
| By: | Hsien-Ming Lien; Linda Wu; Tzu-Ting Yang |
| Abstract: | We quantify behavioral responses to estate taxation by exploiting two large and opposing reforms in Taiwan. A fundamental challenge is that estates are observed only at death, complicating treatment assignment. To address this, we link administrative estate and wealth records to implement a prediction-based difference-in-difference design. We estimate elasticities of taxable estates of 2.8 for the tax increase and 0.5 for the tax cut. Several patterns indicate wealth-shifting avoidance rather than real wealth changes: liquid assets reported at death diverge from pre-death holdings, closely held firm owners inflate liabilities to reduce book values, and heirs' labor supply remains stable despite sizable inheritance shocks. We interpret the asymmetry through a simple model of avoidance with sunk costs, suggesting that the tax-increase elasticity better reflects the long-run response. This would imply a revenue-maximizing rate of 21% that is close to the OECD-average top statutory rate today. |
| Keywords: | Estate taxes; Inheritance |
| JEL: | H26 H31 D64 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26053 |
| By: | Tommaso Giommoni; Gabriel Loumeau; Marco Tabellini |
| Abstract: | In this paper, we provide systematic evidence in support of the long-standing hypothesis that taxation was an important driver of the French Revolution. We first document that areas with heavier taxes experienced more riots between 1750 and 1789 and voiced more complaints against taxation in the "cahiers de doléances" of 1789. After showing that these effects are driven by indirect taxes, we exploit sharp spatial differences in the salt tax and the "traites"-the two principal indirect levies-to implement a regression discontinuity design (RDD). We find that unrest was higher on the high-tax side of the border. These effects intensified over time, peaking in the 1780s, and were stronger where fiscal disparities were larger and Enlightenment ideas more widespread. We further show that adverse weather shocks amplified unrest in high-tax municipalities. We then document that taxation fueled the spread of unrest during the "Grande Peur"-the wave of revolts that swept France in July 1789 and culminated in the abolition of feudal privileges. Finally, we link taxation to revolutionary politics in Paris, documenting that deputies from heavily taxed constituencies were more likely to frame the tax system as oppressive, support the Revolution, demand the abolition of the monarchy, and vote for the king's execution. |
| Keywords: | Taxation, French Revolution, state capacity, regime change. |
| JEL: | D74 H20 H31 N43 O23 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26049 |
| By: | David Gstrein; Florian Neumeier; Andreas Peichl; Pascal Zamorski |
| Abstract: | This paper presents novel estimates of the incidence of corporate taxes that, for the first time, account for commercial real estate. We combine unique real estate data with administrative data on wages and profits in Germany. We leverage over 17, 000 local business tax changes for our empirical analysis. Our estimates indicate that a one percentage point increase in local business taxes reduces commercial real estate prices by 2%, while residential real estate prices decline by 1%. Wages decline by approximately 1%, and profits decline by about 2%. Using the reduced-form estimates, we update current incidence measures within a spatial-equilibrium framework. |
| Keywords: | Corporate taxation, tax incidence, real estate markets |
| JEL: | H22 H25 H71 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:25143 |
| By: | Canavire-Bacarreza, Gustavo; Cansino Montanez, Kenyi Alain; Castro-Peñarrieta, Luis; Martínez-Vázquez, Jorge; Beverinotti, Javier |
| Abstract: | Many decentralized countries struggle with low levels of subnational tax effort. As a remedy for this situation, specific-purpose incentive schemes designed for own revenue mobilization at the subnational level can be simple, efficient, and cost-effective tools. We examine the effects of an incentive transfer program established in 2010 in Peru aimed at increasing property tax revenue at the subnational level. Specifically, Peruvian districts would receive a monetary transfer if they increased their property tax collection above a certain threshold in the previous year, thereby raising their own revenues. Using quasi-experimental methods, we find that the property tax revenue of districts that (actively) participated in the program significantly increased over the following decade. Our results are robust to the choice of estimator and a series of additional tests. |
| Keywords: | Property tax;Vertical Fiscal Imbalance;Tax Effort |
| JEL: | H71 H77 C21 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:14569 |
| By: | Annica Gehlen; Sebastian Becker; Johannes Geyer; Peter Haan |
| Abstract: | We provide novel evidence on the trade-off between insurance and incentives when adjusting disability insurance (DI) benefit generosity using a comprehensive measure that encompasses not only the effect on take-up but also behavioral responses of DI recipients with respect to employment and exit from DI. Based on administrative data from the German pension insurance and exogenous policy variation, we identify the relevant behavioral margins induced by a change in benefit generosity. Using a theoretical framework, we show that our comprehensive measure of incentive effects implies a fiscal multiplier of 1.83. Incorporating elasticities with respect to exit from DI increases the fiscal multiplier compared to estimates that only account for take-up elasticities. In the context of the model, we estimate that increasing benefits is welfare improving, given the insurance effects of DI benefits estimated in previous literature. |
| Keywords: | disability insurance, pension reform, wealth effect, labor supply, mortality, RDD |
| JEL: | H55 I12 J22 J26 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:25148 |
| By: | Roukiatou Nikiema; Pam Zahonogo; Romain Houssa |
| Abstract: | This paper examines the role of institutional factors in shaping taxpayer behaviour, using survey data from approximately 70, 000 individuals across 29 Sub-Saharan African countries in 2011 and 2016. The results show that individuals are more likely to comply with tax obligations when they perceive greater difficulties in evading taxes, have confidence in the tax administration, and view it as less corrupt. Compliance is also higher when respondents perceive higher-quality public goods and services and do not perceive ethnic discrimination in government policies. We present heterogeneous analysis based on the natural resource abundance status of respondents' countries. |
| Keywords: | taxpayer behaviour, tax compliance, institutions, Sub-Saharan Africa |
| JEL: | H3 K42 O43 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12621 |
| By: | Michael A. Clemens |
| Abstract: | The US government in 2025 imposed a $100, 000 tax on each high-skill foreign worker entering with an H-1B work visa. The only public economic justification calculates the tax to offset an estimated wage penalty for H-1B workers relative to US natives. But this estimate suffers from substantial bias. Reexamining the same data shows that H-1B workers receive a modest wage premium relative to comparable natives, roughly 6 percent on average-inconsistent with any wage penalty-when using equivalent wage concepts and comparing workers of the same age, gender, education, and tenure, in the same occupation and local labor market. I trace most of the discrepancy to four methodological choices that inflate the prior estimate: 1) undisclosed imputation of missing data, 2) pooling of non-contemporaneous years, 3) a definition of local labor markets contradicting standard economic practice and US law, and 4) failure to consider H-1B workers' low job tenure. The remaining discrepancy arises from comparing incompatible wage concepts for H-1B versus native workers. Beyond measurement, the theory of public economics implies that a revenue-maximizing immigration tax reduces welfare relative to alternative policies, even with zero weight for immigrant welfare. |
| Keywords: | migration, migrant, immigrant, immigration, earnings, wages, taxes, tariffs, barriers, restrictions, skill, skilled, h-1b, welfare, native, citizen, college, stem, worker, foreign, labor, labour |
| JEL: | J08 J38 J68 H21 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26072 |
| By: | Bargain, Olivier (University of Bordeaux); Jara, H. Xavier (London School of Economics); Magejo, Prudence (University of the Witwatersrand); Ntuli, Miracle (University of the Witwatersrand) |
| Abstract: | Market forces, and notably the role of trade openness, contribute to shaping inequality in South Africa and may limit the inclusiveness of its growth path. Recently, policy reforms may have helped to mitigate these effects. To better understand these developments, we analyze trends in post-tax income inequality using matched employer-employee administrative data from 2012 to 2021 and an original decomposition based on counterfactual tax microsimulations. Our results show that the benefits of increased trade openness during this period has benefited top earners essentially, while other workers - particularly those in the middle class - were adversely affected. This inequality-enhancing impact was partially offset by the automatic stabilizing response of the personal income tax system and by reforms that increased its progressivity. Overall, the analysis highlights the critical role of fiscal policy in counteracting inequality arising from labor-market disparities linked to globalization. |
| Keywords: | trade, inequality, taxation, decomposition |
| JEL: | F16 F6 H24 I3 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18551 |