Arbeitspapier
Tax Responses in Local Public Finance: The Flypaper Effect at Work
The transfer elasticity of income tax rates is an important parameter in public finance. Given the significant fiscal autonomy of Swiss municipalities, Switzerland is an ideal setting for examining behavioral responses to tax policy. Using a regression kink design, we find robust causal evidence that transfers have a positive local average treatment effect on municipal expenditures while leaving the income tax rate (and other tax rates) unchanged. Thus, 'money sticks where it hits', providing comprehensive support for the flypaper effect, including with regard to income tax responses.
- Language
-
Englisch
- Bibliographic citation
-
Series: CESifo Working Paper ; No. 10354
- Classification
-
Wirtschaft
Single Equation Models; Single Variables: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions
State and Local Budget and Expenditures
Intergovernmental Relations; Federalism; Secession
- Subject
-
public finance
regression kink design
flypaper effect
transfers
- Event
-
Geistige Schöpfung
- (who)
-
Köthenbürger, Marko
Loumeau, Gabriel
- Event
-
Veröffentlichung
- (who)
-
Center for Economic Studies and ifo Institute (CESifo)
- (where)
-
Munich
- (when)
-
2023
- Handle
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Köthenbürger, Marko
- Loumeau, Gabriel
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2023
Other Objects (12)
Tax Competition and Direct Democracy in Local Public Finance - Empirical Work on Switzerland
Identifying Tax-Setting Responses from Local Fiscal Policy Programs
Behavioral Responses to Local Tax Rates: Quasi-Experimental Evidence from a Foreigners' Tax Scheme in Switzerland
Higher Tax and Less Work: An Optimal Response to Relative Income Concern
Tax and public finances: The fundamentals
Local Interaction in Tax Evasion
Essays on Banks' Tax Response
Cheating Responses to Tax Evasion
Tax Responses in Platform Industries
Response times and tax compliance
A wealth tax at work
The cash flow tax as a local business tax
Tax Competition and Direct Democracy in Local Public Finance - Empirical Work on Switzerland
Identifying Tax-Setting Responses from Local Fiscal Policy Programs
Behavioral Responses to Local Tax Rates: Quasi-Experimental Evidence from a Foreigners' Tax Scheme in Switzerland
Higher Tax and Less Work: An Optimal Response to Relative Income Concern
Tax and public finances: The fundamentals
Local Interaction in Tax Evasion
Essays on Banks' Tax Response
Cheating Responses to Tax Evasion
Tax Responses in Platform Industries
Response times and tax compliance
A wealth tax at work
The cash flow tax as a local business tax
Tax Competition and Direct Democracy in Local Public Finance - Empirical Work on Switzerland
Identifying Tax-Setting Responses from Local Fiscal Policy Programs
Behavioral Responses to Local Tax Rates: Quasi-Experimental Evidence from a Foreigners' Tax Scheme in Switzerland
Higher Tax and Less Work: An Optimal Response to Relative Income Concern
Tax and public finances: The fundamentals
Local Interaction in Tax Evasion
Essays on Banks' Tax Response
Cheating Responses to Tax Evasion
Tax Responses in Platform Industries
Response times and tax compliance
A wealth tax at work