Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2023-10-12
Number: 23-053/V
Author-Name: José Victor C. Giarola
Author-Workplace-Name: Maastricht University
Author-Name: Olivier Marie
Author-Workplace-Name: Erasmus University Rotterdam
Author-Name: Frank Cörvers
Author-Workplace-Name: Maastricht University
Author-Name: Hans Schmeets
Author-Workplace-Name: Maastricht University
Title: Tax-Induced Emigration: Who Flees High Taxes?  Evidence from the Netherlands
Abstract: We  study  the  impact  of  a  policy  change  in  the  Netherlands  that  reduced preferential  tax  treatment  duration  for  high-skilled  migrants  arriving  from  specific  countries   in   certain   years.   Utilizing   comprehensive   tax   and   population   data,   we   document substantial tax-induced emigration responses, primarily driven by the top 1% of   earners.   Highly   mobile   individuals   within   the   top   5%   also   emigrate   sooner, particularly  to  competing countries  offering  tax-breaks to  attract  skilled  workers.  Crucially, we uncover no change in mobility behavior among lower-earning workers. The increased  tax  receipts  from  lower-income  individuals  who  remain  offset  the  loss  from  fleeing high earners, making the policy fiscally cost-neutral.
Classification-JEL: F22, H31, J61.
Keywords: Taxation, immigration, labor income, Netherlands.
File-URL: https://papers.tinbergen.nl/23053.pdf
File-Format: application/pdf
File-Size: 2.187.494 bytes
Handle: RePEc:tin:wpaper:20230053