Ethnicity and tax filing behavior

Bastani, Spencer and Giebe, Thomas and Miao, Chizheng (2019): Ethnicity and tax filing behavior. Forthcoming in: Journal of Urban Economics

Abstract

We analyze differences in tax filing between natives and immigrants, focusing on two empirical examples. First, we study deductions for costs associated with traveling between home and work allowed in the Swedish tax code. Using the total population of commuters within Sweden's largest commuting zone, we find that newly arrived immigrants file substantially less than natives, immigrants with a longer stay behave more like natives, and immigrants with the longest stay file the most, even more than natives. Second, we analyze bunching behavior among the self-employed at a large salient kink point of the Swedish income tax schedule. We find much less bunching among immigrants, even after a long time in the host country, and the largest differences relative to natives in residential areas with a high immigrant concentration. Our findings have implications for the equity and efficiency of the tax system and the spatial patterns of residential and occupational choices for different ethnic groups.

• Item Type: MPRA Paper
• Language: English
• Keywords: deductions, tax filing, bunching, immigrants, natives, integration
• Subjects: D - Microeconomics > D3 - Distribution > D31 - Personal Income, Wealth, and Their Distributions; H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H21 - Efficiency ; Optimal Taxation; H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H24 - Personal Income and Other Nonbusiness Taxes and Subsidies; H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H26 - Tax Evasion and Avoidance; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J22 - Time Allocation and Labor Supply; J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J61 - Geographic Labor Mobility ; Immigrant Workers; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R2 - Household Analysis > R23 - Regional Migration ; Regional Labor Markets ; Population ; Neighborhood Characteristics

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