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IEB Report 4/2022: La fiscalidad del carbono

La quema de combustibles fósiles como el carbón, el petróleo y el gas supone la emisión a la atmósfera de gases que actúan de manera similar al cristal de un invernadero, al retener el calor
del Sol e impedir que escape al espacio, incrementando con ello la temperatura de la Tierra. Este calentamiento global está provocando un cambio en el clima que constituye una grave amenaza, por las negativas consecuencias naturales, sociales y territoriales que puede generar.

Presentación IEB Report 4/2022: La fiscalidad del carbono

10 de marzo – SALA RAMON Y CAJAL – 11h-13.15h

2023/03: Optimal tax administration responses to fake mobility and underreporting

In a two-country model, the citizens of a ‘big home country’ can either fictitiously move residence to a ‘small foreign country’ where residence-based taxes are lower (external tax avoidance), or under-report the tax base at home (internal tax avoidance). Tax setting is the result of Cournot-Nash competition between revenue maximizing governments, with the home government also setting two types of administration policies, one for each form of tax avoidance. We show that although it is optimal to employ both types of administration policies, which in themselves are both effective at tackling the targeted form of tax avoidance, the optimum is characterized by a tradeoff in terms of policy outcomes: either internal avoidance increases and external avoidance decreases, or the opposite, depending on the characteristics of the fiscal environment.

2023/02: Fiscal knowledge and its impact on revealed MWTP in Covid times: Evidence from survey data

Individual preferences over public policies should ideally be based on the possession of correct information about their reality. To test whether this holds, we conducted four waves of a survey, every six months since May 2020 (still under the COVID-19-lockdown), asking basic macro questions regarding the level of tax burden, of public debt, and of the underground economy in Spain. The percentage of correct responses (defined within broad ranges) never reaches 35%, and it is by far lowest for public debt. For the tax burden, left-wing individuals (with respect to right-wing) make more errors, and highly educated people (with respect to the rest of society) make fewer. No clear deterministic patterns arise for public debt and for the underground economy. Independently of the percentage of errors, we infer the existence of relative biases across different social characteristics: highly educated people tend to undervalue the level of the tax burden and of the underground economy and overvalue the level of public debt; leftist individuals undervalue the level of the tax burden and of the public debt but overvalue the level of the underground economy. There are also significant gender biases: with respect to men, women overvalue the tax burden and the importance of the underground economy, and undervalue the level of public debt. This misinformation and biases correlate with the marginal willingness to pay taxes (MWTP). MWTP is 10% higher under the presence of misinformation. This is particularly so for those individuals who undervalue the real level of the tax burden. Although COVID-19 generates greater interest to collect information, including about fiscal issues, there is a decrease in knowledge. The pandemic seems to have produced an excess of information up to causing misinformation. We also observe a general tendency to undervalue the level of public debt provoked by the exposure to COVID-19, which might be caused by the lax fiscal policy carried out during the pandemic.

SEMINAR: Ferran Elias (Universitat de València) – «The Causes of Duality in the Labor Market: Evidence from Spain’s Payroll Tax and Employment Protection Reforms»

February 14, 2023 – Room 1038 – 14.30h

2022/05: Public transportation, fare policies and tax salience

This paper empirically tests whether property owners react to the salience of taxes in terms of their consumption of public services. Exploiting a policy change that reduced fares on public transport in various municipalities of the metropolitan area of Barcelona, we find that salience of the tax to finance the fare reduction increases the consumption of public transportation. Our empirical findings support the hypothesis that the salience of taxes may affect the consumption behavior of taxpayers and our main results contribute to previous empirical evidence relating tax salience and consumption behavior regarding public services.