Behavioral Responses To Local Tax Rates

On March 17, 2017, from 13.00 to 14.00, we are happy to announce the seminar organized by the Kraks Fond – Institute for Urban Economic Research: “Behavioral Responses to Local Tax Rates: Quasi-Experimental Evidence from a Foreigners’ Tax Scheme in Switzerland” by Kurt Schmidheiny, University of Basel, Switzerland.

Date and location

Fæstningens Materialgård
Frederiksholms kanal 30
1220, Copenhagen

About Kurt Schmidheiny

Kurt Schmidheiny is Professor of Applied Econometrics at the University of Basel in Switzerland. He is also a Research Fellow at the Centre for Economic Policy Research (CEPR, London) and at CESifo (Munich), a member of the executive committee of the Urban Economics Association and of the editorial board of the Journal of Urban Economics. His research focuses on tax competition, fiscal federalism and urban economics. His work is published in the Journal of Political Economy, Economic Journal, Journal of Public Economics, Journal of Urban Economics, Regional Science and Urban Economics, and Journal of Economic Geography.

About the study

We study behavioral responses to local income taxes exploiting a special tax regime which applies to foreign employees residing in Switzerland. The used institutional setting generates two thresholds through which locally heterogeneous taxation is assigned: An income threshold at 120,000 Swiss francs and a duration threshold at 5 years of stay in Switzerland. We exploit these thresholds by applying a discontinuity in density design and a fuzzy RDD to administrative income data. We find causal evidence for strategic income bunching for wage earners and tax induced intra-national mobility. Several pieces of evidence suggest that individuals have to “learn the tax code” and that knowledge and information transmission through local networks plays a major role in the behavioral response to tax incentives. Read more about the study here.

Registration

To guarantee an optimal supply of coffee and cakes, please send an e-mail to Laura Dedenroth (lde@kraksfond.dk) or Marie Lundbo (mlu@kraksfond.dk), no later than March 13, 2017 if you would like to attend the seminar.