Mobility and local income redistribution

• Autores: Sigrid Roehrs, David Stadelmann
• Localización: Documents de treball IEB, Nº. 4, 2010
• Idioma: inglés
• Enlaces
  • Texto completo (pdf)
• Resumen

  • Mobility may undermine local income redistribution in federal systems, because rich taxpayers can evade high taxes by moving to low tax jurisdictions. By analyzing a model of local income redistribution with endogenous voting, income heterogeneity and an exogenously given degree of mobility we focus explicitly on the link between redistribution and mobility. Our findings suggest a nonlinear relationship between redistribution and mobility: high and low degrees of mobility permit major income redistribution as income sorting is absent, while a medium degree of mobility leads to high differences in tax rates between jurisdictions and thus to income sorting and less redistribution.