Austerity and Distributional Policy

Arbeitspapier

What are the effects of austerity on distributional policy? We exploit the autonomy of Italian municipalities in setting non-linear income taxes and the exogenous introduction of a fiscal rule to show that austerity increases tax progressivity. Consistent with this evidence, we find that in a panel of countries austerity correlates with higher marginal tax rates on top, but not on average earners. The increase in progressivity in Italy is driven by mayors having college-degree or working in high-skill occupations, while less-educated or lower-skilled mayors raise taxes uniformly. In the first post-reform election, mayors of former type have higher reelection odds.

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• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CESifo Working Paper ; No. 8644

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Positive Analysis of Policy Formulation and Implementation ; Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes ; State and Local Government; Intergovernmental Relations: General
• Thema: austerity ; fiscal rules ; non-linear income taxation ; difference-in-discontinuity

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Alpino, Matteo ; Asatryan, Zareh ; Blesse, Sebastian ; Wehrhöfer, Nils
• Ereignis: Veröffentlichung
• (wer): Center for Economic Studies and Ifo Institute (CESifo)
• (wo): Munich
• (wann): 2020

Weitere Informationen

• Handle: http://hdl.handle.net/10419/229462