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Taxation and Mobility: Evidence from Tax Decentralization in Italy

Author

Listed:
  • Enrico Rubolino
  • Tommaso Giommoni

Abstract

We study the impact of taxation on the location choices of individuals and tax bases in Italy. We exploit some recent tax decentralization reforms, which granted regions and municipalities greater power in setting income tax rates across brackets. Combining granular micro-level data on tax residence transfers with tax rate variations both within and across locations, we show that taxation significantly shapes location decisions. The mobility response greatly varies across the income distribution, with higher responsiveness among top incomes. Yet, our estimates imply that revenue losses due to tax-induced mobility are small, making local redistribution feasible at least over the medium-run.

Suggested Citation

  • Enrico Rubolino & Tommaso Giommoni, 2023. "Taxation and Mobility: Evidence from Tax Decentralization in Italy," CESifo Working Paper Series 10655, CESifo.
    • Handle: RePEc:ces:ceswps:_10655
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    Cited by:

    1. Giommoni, Tommaso, 2024. "A fistful of dollars: Rent seeking behaviour and local tax manipulation," Journal of Economic Behavior & Organization, Elsevier, vol. 220(C), pages 453-469.

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    More about this item

    Keywords

    local income taxation; migration; tax decentralization;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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