CLEAN Seminar - Simone Paci (Columbia University)

The next CLEAN seminar will take place on Monday 13 February in distance at 4.30pm Italian time.

The presenter will be Simone Paci (Columbia University) . The title of the paper is: "Rules Matter: How Tax Enforcement Increases Revealed Preference for Redistribution" .

Abstract:

Does a more equitable tax system lead to a more equitable society? Exploring the impact of state intervention against tax evasion in Italy, Slovakia, and Australia this study shows that individuals' preference for redistribution is affected by changes in tax enforcement, but the direction of the relationship depends on the nature of the enforcement. In Italy and Slovakia, local shocks to tax enforcement are associated with stronger pro-redistribution behaviors, measured through a similar tax system that allows individuals to redirect a percentage of their income tax from the national budget to local social initiatives. Leveraging an Italian cadastral update, which led to stricter enforcement of property taxation, I employ a difference-in-difference design exploiting the policy’s staggered implementation. As the horizontal equity of the municipal property tax increases, individuals reveal increased intrinsic demand for local social spending, as more taxpayers elect to donate to social initiatives. Similarly, in Slovakia, enforcement against VAT-evading businesses is associated with greater tax funds donated to public-benefit organizations. By contrast, in the 1998 Australian elections, the zipcode density of evaders caught by the tax authority is associated with the vote share for the Liberal-National coalition, which campaigned on a single-issue platform for regressive tax reform. I argue that the divergence stems from different perceptions of the legitimacy and equity of enforcement, which were viewed favorably in Italy and Slovakia, but sparked protests in Australia. These patterns illustrate how government action influences individual preferences and attitudes and that a positively-perceived, better-functioning taxation system supports a more progressive society

You may follow the event online via Zoom Meetings at the following link: https://unibocconi-it.zoom.us/j/93968552765?pwd=cEJoTDFldWZNL3BZZWZNdWtzSXZwUT09  - passcode: 153790