Relocation of the Rich : Migration in Response to Top Tax Rate Changes from Spanish Reforms
Agrawal, David R.
Foremny, Dirk
Xarxa de Referència en Economia Aplicada (XREAP)

Imprint: Xarxa de Referència en Economia Aplicada (XREAP) 2018
Description: 87 p.
Abstract: Recent Spanish tax reform granted regions the authority to set income tax rates, resulting in substantial tax di erentials. We use individual-level information from Social Security records over a period of one decade. Conditional on moving, taxes have a significant effect on location choice. A one percent increase in the net of tax rate for a region relative to others increases the probability of moving to that region by 1. 7 percentage points. Focusing on the stock of top-taxpayers, we estimate an elasticity of the number of top taxpayers with respect to net-of-tax rates of 0. 85. Using this elasticity, a theoretical model implies that the mechanical increase in tax revenue due to higher tax rates is larger than the loss in tax revenue from the out-flow of migration.
Language: Anglès.
Series: Xarxa de Referència en Economia Aplicada (XREAP): Documents de treball de la Xarxa de Referència en Economia Aplicada (XREAP)
Series: XREAP ; 2018-09
Document: workingPaper
Subject: Domicili fiscal ; Impostos sobre la renda ; Comunitats autònomes ; Espanya ; Tax Domicile ; Income tax ; Autonomous communities ; Spain

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 Record created 2019-01-22, last modified 2019-01-26

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