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Mobility Responses to Special Tax Regimes for the Super-Rich: Evidence from Switzerland

Author

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  • Enea Baselgia
  • Isabel Z. Martínez

Abstract

We use a novel rich-list data set to estimate the sensitivity of the location choice of superrich foreigners to a special tax regime, under which wealthy foreigners are taxed on their living expenses, rather than their true income and wealth. We are the first to evaluate this controversial Swiss policy, and show that when some Swiss cantons abolished this practice, their stock of super-rich foreigners dropped by 43% as a consequence. We find no response for the Swiss super-rich, who were unaffected by the policy change.

Suggested Citation

  • Enea Baselgia & Isabel Z. Martínez, 2024. "Mobility Responses to Special Tax Regimes for the Super-Rich: Evidence from Switzerland," CESifo Working Paper Series 11093, CESifo.
    • Handle: RePEc:ces:ceswps:_11093
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp11093.pdf
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    References listed on IDEAS

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    1. David R. Agrawal & Dirk Foremny, 2019. "Relocation of the Rich: Migration in Response to Top Tax Rate Changes from Spanish Reforms," The Review of Economics and Statistics, MIT Press, vol. 101(2), pages 214-232, May.
    2. Feld Lars P. & Reulier Emmanuelle, 2009. "Strategic Tax Competition in Switzerland: Evidence from a Panel of the Swiss Cantons," German Economic Review, De Gruyter, vol. 10(1), pages 91-114, February.
    3. Henrik Jacobsen Kleven & Camille Landais & Esben Schultz, 2014. "Migration and Wage Effects of Taxing Top Earners: Evidence from the Foreigners' Tax Scheme in Denmark," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(1), pages 333-378.
    4. Kurt Schmidheiny & Sebastian Siegloch, 2023. "On event studies and distributed‐lags in two‐way fixed effects models: Identification, equivalence, and generalization," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 38(5), pages 695-713, August.
    5. Gabriel Zucman, 2013. "The Missing Wealth of Nations: Are Europe and the U.S. net Debtors or net Creditors?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(3), pages 1321-1364.
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    Cited by:

    1. Bury, Yannick & Feld, Lars P. & Köhler, Ekkehard A., 2023. "On the fiscal sustainability of Swiss Cantons since 1905," Freiburg Discussion Papers on Constitutional Economics 23/4, Walter Eucken Institut e.V..

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    More about this item

    Keywords

    super-rich; location-choice; tax mobility; expenditure-based taxation; preferential taxation; tax competition;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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