Working Paper: CEPR ID: DP17967
Authors: Enea Baselgia; Isabel Z. Martínez
Abstract: We collect, digitize, and supplement Swiss rich lists published in the “BILANZ” magazine since 1989. Based on this new dataset, we estimate the sensitivity of the location choice of super-rich foreigners to a preferential tax scheme, under which wealthy foreigners are taxed on their expenses, rather than their true income and wealth. We are the first to evaluate this infamous policy (which bears similarities with “non-dom” taxation in the UK), and show that when some Swiss cantons abolished this practice, their stock of super-rich foreigners dropped by 30% as a consequence. We find no response for the unaffected Swiss super-rich.
Keywords: superrich; tax mobility; preferential taxation; tax competition; wealth inequality
JEL Codes: H24; H71; H73; R23; C81; D31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Abolition of expenditure-based taxation (H29) | Decrease in the stock of superrich foreigners (F29) |
| Abolition of expenditure-based taxation (H29) | Decrease in the number of superrich foreigners in affected cantons (F69) |
| Decrease in the stock of superrich foreigners (F29) | Sensitivity to availability of tax privilege (H29) |
| Abolition of expenditure-based taxation (H29) | No effect on Swiss-born superrich taxpayers (F38) |