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Patriotism, taxation and international mobility

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  • Qari, Salmai
  • Konrad, Kai A.
  • Geys, Benny

Abstract

For patriotic citizens, living in their native country is intrinsically preferable compared to living in the diaspora. In this paper, we analyze the implications of such a patriotic lock-in in a world with international migration and redistributive taxation. In a formal model of redistribution with international migration and fiscal competition we derive the main hypothesis: that countries with a more patriotic population should have higher redistributive taxes. Using ISSP survey data and combining them with OECD taxation data, we find robust evidence suggesting that a) higher patriotism is associated with higher tax burdens, and b) this relation is stronger for the upper-middle range of the income distribution. -- Die individuelle Entscheidung, dauerhaft im Ausland zu leben, wird sowohl von finanziellen als auch von nicht-monetären Aspekten beeinflusst. Patriotismus (Heimatbindung) ist einer dieser nicht-monetären Faktoren, der zwischen den Ländern aber auch innerhalb eines Landes variiert. Ausgehend davon analysieren wir zunächst theoretisch die Auswirkungen von Patriotismus auf den Steuerwettbewerb zwischen zwei Ländern. In der ersten Stufe des Spieles entscheiden die Individuen, ob sie auswandern oder nicht und in der zweiten Stufe erheben die Länder vom hoch-produktiven Anteil der Bevölkerung (unabhängig vom Ursprung der Individuen) Steuern zur Umverteilung. Wenn die ursprüngliche Bevölkerung (vor Migrationsbewegungen) in Land A im Durchschnitt heimatverbundener als die in Land B ist, reagiert sie weniger elastisch auf den Steuersatz. Im Gleichgewicht führt daher höherer (durchschnittlicher) Patriotismus zu höheren Steuersätzen. Im zweiten Teil überprüfen wir diese Hypothese empirisch, indem wir ISSP-Surveydaten und OECDSteuerdaten zusammenführen. Im Ländervergleich besteht für gleiche relative Einkommen ein positiver Zusammenhang zwischen Patriotismus und Steuerbelastung.

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Paper provided by Social Science Research Center Berlin (WZB) in its series Discussion Papers, Research Unit: Market Processes and Governance with number SP II 2009-03.

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Date of creation: 2009
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Handle: RePEc:zbw:wzbmpg:spii200903

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Keywords: Patriotism; international mobility; taxation; redistribution; fiscal competition;

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Cited by:
  1. Tobias König & Andreas Wagener, 2012. "Culture and Tax Structures," CESifo Working Paper Series 3748, CESifo Group Munich.
  2. Seele, Peter, 2011. ""If your letter was in German, I would not understand a bit, and would have ignored that": Preliminary findings from a survey of highly skilled migrants from India and China with working/edu," Discussion Papers 14/2011, Witten/Herdecke University, Faculty of Management and Economics.
  3. Salmai Qari & Kai Konrad & Benny Geys, 2012. "Patriotism, taxation and international mobility," Public Choice, Springer, Springer, vol. 151(3), pages 695-717, June.
  4. Philipp Doerrenberg & Denvil Duncan & Clemens Fuest & Andreas Peichl, 2012. "Nice Guys Finish Last: Are People with Higher Tax Morale Taxed more Heavily?," CESifo Working Paper Series 3858, CESifo Group Munich.
  5. Konrad, Kai A. & Qari, Salmai, 2012. "The Last Refuge of a Scoundrel?," Munich Reprints in Economics, University of Munich, Department of Economics 13960, University of Munich, Department of Economics.
  6. Koenig, Tobias & Wagener, Andreas, 2013. "Tax structure and government expenditures with tax equity concerns," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 90(C), pages 137-153.

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