Working Paper: CEPR ID: DP7216
Authors: Salmai Qari; Kai A. Konrad; Benny Geys
Abstract: For patriotic citizens, living in their native country is intrinsically preferable compared to living in the diaspora. In this paper, we analyze the implications of such a patriotic lock-in in a world with international migration and redistributive taxation. In a formal model of redistribution with international migration and fiscal competition we derive the main hypothesis: that countries with a more patriotic population should have higher redistributive taxes. Using ISSP survey data and combining them with OECD taxation data, we find robust evidence suggesting that a) higher patriotism is associated with higher tax burdens, and b) this relation is stronger for the upper-middle range of the income distribution.
Keywords: fiscal competition; international mobility; patriotism; redistribution; taxation
JEL Codes: H20; H73
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Patriotism (F52) | Willingness to pay taxes (H29) |
| Willingness to pay taxes (H29) | Tax burden (H22) |
| Patriotism (F52) | Tax burden (H22) |
| Patriotism (F52) | Higher taxes (H29) |
| Higher levels of patriotism (F52) | Greater tax burden for upper-middle income groups (H22) |