Hybrid seminar: Tax-Induced Emigration: Who Flees High Taxes? Evidence from the Netherlands
On Thursday February 15th, 2024, Olivier Marie (Erasmus University Rotterdam) will give a presentation titled: "Tax-Induced Emigration: Who Flees High Taxes? Evidence from the Netherlands." To attend this seminar, please send an e-mail to Simone Pailer (S.Pailer@cpb.nl). You will be registered at the reception or will receive a Webex invitation via Outlook.
We study the impact of a policy change in the Netherlands that reduced preferential tax treatment duration for high-skilled migrants arriving from specific countries in certain years. Utilizing comprehensive tax and population data, we document substantial tax-induced emigration responses, primarily driven by the top 1% of earners. Highly mobile individuals within the top 5% also emigrate sooner, particularly to competing countries offering tax-breaks to attract skilled workers. Crucially, we uncover no change in mobility behavior among lower-earning workers. The increased tax receipts from lower-income individuals who remain offset the loss from fleeing high earners, making the policy fiscally cost-neutral.