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on Public Finance |
| 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: | 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: | 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: | 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: | 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: | 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 |