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Is high-skilled migration harmful to tax systems’ progressivity

Author

Listed:
  • Laurent Simula

    (University of Lyon, ENS de Lyon, and GATE, France)

  • Alain Trannoy

    (EHESS and AMSE, Francee)

Abstract

Decreased transportation costs have led to the transmission of ideas and values across national borders that has helped reduce the barriers to international labor mobility. In this context, high-skilled individuals are more likely to vote with their feet in response to high income taxes. It is thus important to examine the magnitude of tax-driven migration responses in developed countries as well as the possible consequences of income tax competition between nation states. More specifically, how does the potential threat of migration affect a country’s optimal income tax policies?

Suggested Citation

  • Laurent Simula & Alain Trannoy, 2018. "Is high-skilled migration harmful to tax systems’ progressivity," IZA World of Labor, Institute for the Study of Labor (IZA), pages 423-423, February.
    • Handle: RePEc:iza:izawol:journl:y:2018:n:423
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    References listed on IDEAS

    as
    1. Etienne Lehmann & Laurent Simula & Alain Trannoy, 2014. "Tax me if you can! Optimal Nonlinear Income Tax Between Competing Governments," The Quarterly Journal of Economics, Oxford University Press, vol. 129(4), pages 1995-2030.
    2. Henrik Jacobsen Kleven & Camille Landais & Esben Schultz, 2014. "Migration and Wage Effects of Taxing Top Earners: Evidence from the Foreigners' Tax Scheme in Denmark," The Quarterly Journal of Economics, Oxford University Press, vol. 129(1), pages 333-378.
    3. repec:eee:juecon:v:102:y:2017:i:c:p:76-90 is not listed on IDEAS
    4. Young, Cristobal & Varner, Charles, 2011. "Millionaire Migration and State Taxation of Top Incomes: Evidence From a Natural Experiment," National Tax Journal, National Tax Association;National Tax Journal, vol. 64(2), pages 255-283, June.
    5. Henrik Jacobsen Kleven & Camille Landais & Emmanuel Saez, 2013. "Taxation and International Migration of Superstars: Evidence from the European Football Market," American Economic Review, American Economic Association, vol. 103(5), pages 1892-1924, August.
    6. Grogger, Jeffrey & Hanson, Gordon H., 2011. "Income maximization and the selection and sorting of international migrants," Journal of Development Economics, Elsevier, vol. 95(1), pages 42-57, May.
    7. Peter Ganong & Daniel W. Shoag, 2017. "Why Has Regional Income Convergence in the U.S. Declined?," NBER Working Papers 23609, National Bureau of Economic Research, Inc.
    8. Mirrlees, J. A., 1982. "Migration and optimal income taxes," Journal of Public Economics, Elsevier, vol. 18(3), pages 319-341, August.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    tax competition; top income earners; migration;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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