Beggar-thy-neighbour tax cuts: Mobility after a local income and wealth tax reform in Switzerland

Arbeitspapier

I analyze mobility responses to the unique introduction of regressive local income schedule in the Swiss Canton of Obwalden in 2006, which was aimed at attracting the top 1%. Differencein-Differences estimations comparing Obwalden to all other cantons confirm that the reform successfully attracted rich taxpayers: by 2016, the share of rich in the canton more than doubled and average income per taxpayer was 16% higher relative to 2005. Using individual tax data and an instrumental variable approach, I find a large elasticity of the stock of rich taxpayers of 1.5-2 with respect to the average net-of-tax rate. The corresponding flow elasticity ranges from 6.5 to 10. However, the reform did not yield any Laffer effects. Finally, I find positive effects on local employment: the number of jobs per 1,000 inhabitants rose by an estimated 2.3% relative to other cantons and compared to 2005. However, these employment effects are likely driven by a simultaneous reduction of the corporate tax rate.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: KOF Working Papers ; No. 490

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes ; Fiscal Policies and Behavior of Economic Agents: Household ; State and Local Taxation, Subsidies, and Revenue ; State and Local Government; Intergovernmental Relations: Interjurisdictional Differentials and Their Effects ; Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
• Thema: Mobility ; Personal income tax ; Local taxes ; Tax competition ; Regressive income tax

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Martínez, Isabel
• Ereignis: Veröffentlichung
• (wer): ETH Zurich, KOF Swiss Economic Institute
• (wo): Zurich
• (wann): 2021

Weitere Informationen

• DOI: doi:10.3929/ethz-b-000463387
• Handle: http://hdl.handle.net/10419/235104
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ