Optimal income tax under the threat of migration by top-income earners

Simula, Laurent; Trannoy, Alain

doi:10.1016/j.jpubeco.2009.10.004

Cited by 81 publications

(58 citation statements)

References 46 publications

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“…14 See also the more recent papers by Simula and Trannoy (2010) and especially Lehmann, Simula, and Trannoy (2014) who consider optimal nonlinear income taxation in the presence of migration. 15 The same applies for the macro structural literature that includes migration channels and needs to calibrate the migration elasticities (see Cosar, Guner, and Tybout 2016).…”

Section: A Inventors and Patents: Backgroundmentioning

confidence: 99%

Taxation and the International Mobility of Inventors

Akcigit

Baslandze

Stantcheva

2016

American Economic Review

280

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We study the effect of top tax rates on “superstar” inventors' international mobility since 1977, using panel data on inventors from the US and European Patent Offices. We exploit the differential impact of changes in top tax rates on inventors of different qualities. Superstar inventors' location choices are significantly affected by top tax rates. In our preferred specification, the elasticity to the net-of-tax rate of the number of domestic superstar inventors is around 0.03, while that of foreign superstar inventors is around 1. These elasticities are larger for inventors in multinational companies. An inventor is less sensitive to taxes in a country if his company performs a higher share of its research there. (JEL F22, F23, H24, H31, J61, O31, O34)

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Section: A Inventors and Patents: Backgroundmentioning

confidence: 99%

Taxation and the International Mobility of Inventors

Akcigit

Baslandze

Stantcheva

2016

American Economic Review

280

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“…In Lehmann et al (2014) some agents have an infinite cost of moving, and so will never migrate, regardless of the tax function chosen by the Rawlsian social planner (who therefore has no shortcut to increase social welfare). Simula and Trannoy (2010) show that the Mirrlees (1971) results are no longer valid when agents are mobile. In particular, when the participation constraint is binding (i.e., R(θ) = 0) the planner must reduce the tax burden to avoid migration.…”

Section: Theoretical Frameworkmentioning

confidence: 93%

Taxing High-Income Earners: Tax Avoidance and Mobility

2017

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The IEB research program in Tax Systems Analysis aims at promoting high quality research in the field of taxation, taking into account not only the traditional approach to optimal taxation, but also administrative issues and the decentralization or globalization context. The ultimate aim of the program is to generate socially useful knowledge in this field. Special emphasis is put on empirical research, and on the analysis of the Spanish Tax System. The program enjoys the support from the IEB-Foundation. The IEB working papers represent ongoing research that is circulated to encourage discussion and has not undergone a peer review process. Any opinions expressed here are those of the author(s) and not those of IEB. IEB Working Paper 2017/06 TAXING HIGH-INCOME EARNERS: TAX AVOIDANCE AND MOBILITY *Alejandro Esteller, Amedeo Piolatto, Matthew D. Rablen ABSTRACT: The taxation of high-income earners is of importance to every country and is the subject of a considerable amount of recent academic research. Such high-income earners contribute substantial amounts of tax and generate significant positive spillovers, but are also highly mobile: a 1% increase in the top marginal income tax rate increases outmigrations by around 1.5 to 3%. We review research into taxation of high-income earners to provide a synthesis of existing theoretical and empirical understanding. We offer various avenues for potential future theoretical and empirical research.JEL Codes: H26, H31, K34, K42

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“…As shown by Simula and Trannoy (2010), adding the possibility of migration to the standard Mirrleesian model tends to lower the marginal tax rate for top earners. Their simulations for France suggest that the e¤ect from migration is sizeable.…”

Section: Migrationmentioning

confidence: 99%

Optimal top marginal tax rates under income splitting for couples

Bach¹,

Corneo²,

Steiner³

2012

European Economic Review

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract This paper provides formulas for optimal top marginal tax rates when couples are taxed according to income splitting between spouses, consumption is taxed, and the skill distribution is unbounded. Optimal top marginal income tax rates are computed for Germany using a dataset that includes the tax returns of all German top taxpayers. We …nd that the optimal top marginal tax rate converges to about 2/3 and convergence obtains at income levels that are substantially higher than those currently subject to the actual top tax rate. Terms of use: Documents in EconStor may

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Optimal income tax under the threat of migration by top-income earners

Cited by 81 publications

References 46 publications

Taxation and the International Mobility of Inventors

Taxation and the International Mobility of Inventors

Taxing High-Income Earners: Tax Avoidance and Mobility

Optimal top marginal tax rates under income splitting for couples

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