Who Writes the Check to the Government Does Matter: Evidence from Firm-to-Firm Links
[Job Market Paper]
[2 minute video summary]
Abstract: The design of tax collection is largely considered to be inconsequential in the academic literature, yet policy makers frequently implement reforms to it. Combining a new administrative dataset on firm-to-firm links from Italy and a quasiexperimental research design, I study how firms and markets adapt to a reform of the collection of Value Added Tax (VAT). The reform shifted the responsibility to remit payments of VAT from sellers to “trusted” buyers, such as government entities and large firms. I present three main findings. First, firm-to-firm links subject to the new rules are more likely to become inactive after the introduction of the new rules. Second, I find that the reform was costly for the average firm. Firms more exposed to the reform experienced lower sales and higher exit rates, relative to the counterfactual. Third, I document that the burden of the reform is not evenly distributed across firms. Small firms are hit hardest, while large firms do not appear to be negatively affected. As a result, I show that markets more exposed to the reform became more concentrated.
- Honors: An earlier version of this paper obtained the Vickrey Prize awarded every year to the best paper written by third year students at the economics department at Columbia.
[NEW] Importing Inequality: Immigration and the Top 1 percent
Abstract: In this paper we study the contribution of migrants to the rise in UK top incomes. Using administrative data on the universe of UK taxpayers we show migrants are concentrated at the top of the income distribution, with migrants twice as prevalent in the top 0.1 percent as anywhere in the bottom 96 percent. These high incomes are predominantly from labour, rather than capital, and migrants are concentrated in only a handful of industries, predominantly finance. Almost all (85%) of the growth in the UK top 1% income share over the past 20 years can be attributed to migration.
Research Papers in Progress
Taxation and International Relocation of Top Earners: Estimates from UK Tax Records
(with Arun Advani, Felix Koenig, and Andy Summers)
The Saved and the Probate: The Trade-off between Control and Inheritance Tax Minimization
(with Cameron LaPoint)