A voluntary brain-drain tax
AbstractA major roadblock to the implementation of Bhagwati's proposal to allow developing countries to tax skilled emigrants residing in developed countries (the "brain drain") is the administrative problems associated with collecting this tax in the absence of developed-country cooperation. This paper provides a partial solution to these problems, involving the tax treatment of emigrants who return to their countries of origin. The tax system is structured so that returning emigrants who previously paid the brain-drain tax face lower tax payments than those who evaded the brain-drain tax. Given the expected value of this tax benefit, emigrants are willing to pay the brain-drain tax. In the basic model, a source country's optimal tax system includes this brain-drain tax and does not distort migration decisions.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Public Economics.
Volume (Year): 92 (2008)
Issue (Month): 12 (December)
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Web page: http://www.elsevier.com/locate/inca/505578
H21 H24 H26 H87 Brain-drain tax Emigration Optimal taxation Skilled migration;
Find related papers by JEL classification:
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
- H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
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