Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/226297
Authors: 
Engelmann, Dirk
Janeba, Eckhard
Mechtenberg, Lydia
Wehrhöfer, Nils
Year of Publication: 
2020
Series/Report no.: 
CESifo Working Paper No. 8595
Abstract: 
Mobility of high-income individuals across borders puts pressure on governments to lower taxes. A central tenet of the corresponding textbook argument is that mobile individuals react to tax differentials through migration, and in turn immobile individuals vote for lower taxes. We investigate to which extent this argument is complete. In particular, political ideology may influence voting on taxes. We vary mobility and foreign taxes in a survey experiment within the German Internet Panel (GIP), with more than 3,000 individuals participating. We find that while the treatment effects qualitatively confirm model predictions how voters take mobility of high-income earners into account when choosing domestic taxes, ideology matters: left-leaning high-income individuals choose higher taxes and emigrate less frequently than right-leaning ones. These findings are in line with the comparative-static predictions of a simple model of inequality aversion when the aversion parameters vary with ideology.
Subjects: 
taxation
mobility
ideology
survey experiments
JEL: 
D72
F22
H21
Document Type: 
Working Paper

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