Applied Micro Seminar : Every Tuesday
Time: 12:15 pm – 13:30 pm
Date: 17th of december
Room : 3001

Mathilde MUNOZ (University of Bekerley) – ” Taxing Top Wealth : Migration Responses and their Aggregate Economic Implications.”

Abstract : “Do wealth taxes lead to a harmful exodus of wealthy taxpayers ? Using administrative data on wealth, firm ownership structure, and migration in Sweden and Denmark, we estimate international migration responses to wealth taxation and evaluate the aggregate economic implications of tax-induced migration. Exploiting three large reforms, we find significant migration responses to wealth taxes among the wealthy. We then investigate individual-level, firm-level, and market-level effects of these migration responses. A large fraction of wealthy taxpayers are business owners, and the employment, investments, and value-added of these businesses are negatively affected by owner out-migration. Nevertheless, the aggregate consequences of these effects are modest. We estimate that migration responses to a 1pp increase in the top wealth tax rate decrease the stock of wealthy taxpayers by less than 2% in the long run, and lead to a reduction of 0.05% in aggregate employment, 0.07% in aggregate investment, and 0.13% in aggregate value-added. Hence, our results demonstrate that trickle-down effects of tax-induced migration by the wealthy do exist, but that they are quantitatively small.”

Organizers:

Benoît SCHMUTZ (Pôle d’économie du CREST)

Roland RATHELOT (Pôle d’économie du CREST)

Clément MALGOUYRES (Pôle d’économie du CREST)

Sponsors:
CREST