G in eu context or low tax states within us

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Unformatted text preview: top skilled individuals move to low tax countries (e.g., in EU context) or low tax states (within US Federation) Migration concern bigger in public debate than supply-side within a country debate Little work on tax induced international migration of top skilled workers Hard to get data but interesting variation due to proliferation of special low tax schemes for highly paid foreigners in Europe Kleven-Landais-Saez AER’13 look at football players in Europe (highly mobile group, many tax reforms) ⇒ Find significant migration responses to taxes after football market was de-regulated in ’95 31 KLEVEN-LANDAIS-SAEZ-SCHULTZ ’13 Exploit the 1991 tax scheme in Denmark: high earnings immigrants (≥ 103, 000 Euros/year) taxed at flat 25% rate (instead of regular tax with top 59% rate) for 3 years Use population wide Danish tax data and DD strategy: compare immigrants above eligibility earnings threshold (treatment) to immigrants below threshold (control) Key Finding: Scheme doubles the number of highly paid foreigners in Denmark relative to controls ⇒ Elasticity of migration with respect to the net-of-tax rate above one (much larger than the within country elasticity of earnings) ⇒ Tax coordination will be key to preserve progressive taxation in the European Union 32 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 0 # of foreigners 1000 2000 3000 4000 Figure 3:...
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