On Thursday, November 1, noon-14 pm, Eckhard Janeba, from the TU Berlin will be the speaker of the Research Seminar in Economics. He will present his research paper on "Preferences over Taxation of High Income Individuals: Evidence from Survey and Laboratory Experiments" at Kaminzimmer (room 202), Boltzmannstraße 20, 14195 Berlin.
Mobility of high income individuals across borders puts pressure on governments to lower taxes. A central tenet of the underlying theoretical and empirical models is that mobile individuals react to tax differentials through migration, and in turn immobile households vote for lower taxes in the face of a migration threat. In light of behavioural economics research it is not clear, however, whether this premise holds. In particular, political ideology might influence voting on taxes. We use an experimental survey design and elicit answers from more than 3,000 households in the German Internet Panel (GIP).We use various treatments to understand the role of mobility and ideology in tax choice. We observe substantial deviations from the predicted theoretical equilibrium. In many cases comparative static results prevail, however. Furthermore, political ideology matters: left-leaning households choose higher taxes than right-leaning persons, and center-right leaning individuals tend to emigrate more when the tax at home is high. We compare the results with those from a closely related lab experiment, in which subjects appear to behave more in line with standard predictions.
For further information about the Research Seminar in Economics and its program, please click here.