Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/272020 
Year of Publication: 
2023
Series/Report no.: 
CESifo Working Paper No. 10376
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We provide quasi-experimental evidence on the income tax-induced migration of foreign high-income households living in Switzerland by exploiting the differential tax treatment of UK and US households. While the two groups are similar in terms of non-tax sorting preferences, US households are effectively insulated from Swiss income taxation due to the US world-wide income tax system. Comparing the location choices of UK households (our treatment group) with those of US households (our control group) within a one-hour commuting zone of Zurich, we find a migration elasticity with respect to the net-of-tax rate of around eight. This estimate mirrors the possibility of unrestricted migration between small Swiss municipalities with significantly different income tax rates.
Subjects: 
high-income households
location choice
income taxes
sorting
JEL: 
H24
H71
J44
R32
Document Type: 
Working Paper
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