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Ethnicity and tax filing behavior

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  • Bastani, Spencer
  • Giebe, Thomas
  • Miao, Chizheng

Abstract

We analyze differences in tax filing between natives and immigrants, focusing on two empirical examples. First, we study deductions for costs associated with traveling between home and work allowed in the Swedish tax code. Using the total population of commuters within Sweden’s largest commuting zone, we find that newly arrived immigrants file substantially less than natives, immigrants with a longer stay behave more like natives, and immigrants with the longest stay file the most, even more than natives. Second, we analyze bunching behavior among the self-employed at a large salient kink point of the Swedish income tax schedule. We find much less bunching among immigrants, even after a long time in the host country, and the largest differences relative to natives in residential areas with a high immigrant concentration. Our findings have implications for the equity and efficiency of the tax system and the spatial patterns of residential and occupational choices for different ethnic groups.

Suggested Citation

  • Bastani, Spencer & Giebe, Thomas & Miao, Chizheng, 2020. "Ethnicity and tax filing behavior," Journal of Urban Economics, Elsevier, vol. 116(C).
    • Handle: RePEc:eee:juecon:v:116:y:2020:i:c:s0094119019300920
    DOI: 10.1016/j.jue.2019.103215
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    Cited by:

    1. Dong, Sarah Xue & Sinning, Mathias, 2022. "Trying to Make a Good First Impression: A Natural Field Experiment to Engage New Entrants to the Tax System," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 100(C).
    2. Antoine Malézieux & Benno Torgler, 2021. "Culture, Immigration and Tax Compliance," CREMA Working Paper Series 2021-23, Center for Research in Economics, Management and the Arts (CREMA).
    3. Spencer Bastani & Daniel Waldenström, 2020. "The Ability Gradient in Bunching," CESifo Working Paper Series 8233, CESifo.
    4. Johannes Koeckeis, 2022. "Intra-Household Inequality and Tax Planning of Same-Sex Couples," GRAPE Working Papers 73, GRAPE Group for Research in Applied Economics.
    5. Aldén, Lina & Bastani, Spencer & Hammarstedt, Mats & Miao, Chizheng, 2020. "Ethnic Differences in Long-Term Self-Employment," Working Paper Series 1361, Research Institute of Industrial Economics.
    6. Jagrič Timotej & Lešnik Tomaž & Grbenic Stefan O. & Jagrič Vita, 2019. "The Fulfilment of Tax Obligation in Case of Slovenian Tax Residents Working in Other Countries," Naše gospodarstvo/Our economy, Sciendo, vol. 65(4), pages 27-34, December.
    7. Lina Aldén & Spencer Bastani & Mats Hammarstedt & Chizheng Miao, 2022. "Immigrant-native differences in long-term self-employment," Small Business Economics, Springer, vol. 58(3), pages 1661-1697, March.

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    More about this item

    Keywords

    Deductions; Tax filing; Bunching; Immigrants; Natives; Integration;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • 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 and Avoidance
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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