Abstract: Why do some individuals evade taxes while others do not? We study this question using administrative tax records from Uruguay linked to a tailored survey of taxpayers. Using third-party reports, we measure individual income under-reporting as an indicator of evasion. We then examine how three factors predict who evades: social preferences (e.g., honesty measured through incentivized laboratory games), peers (e.g., the behavior of current and former coworkers), and economic factors (e.g., the marginal tax rate). We find that social preferences have little power to predict evasion, while economic factors matter more and peer behavior is the strongest predictor.
Abstract: Do top-income individuals support different levels of redistribution compared to the rest of society? If so, what drives these differences? We address these questions using a novel dataset that combines administrative tax records with unique survey data on the social and economic preferences of workers in Uruguay. We document a marked decline in support for redistribution among the Top 1% of the income distribution. Comparing this group with the Top 50-2%, we show that differences in support for redistribution are not solely explained by current income or demographics. A set of beliefs, perceptions, and views, including political ideology, meritocratic beliefs, and views on government, account for much of the observed differences. Instead, a set of behavioral traits and social preferences, such as altruism and risk aversion, measured through incentivized online games, contribute little to explaining the gap. Finally, the differences in support for redistribution persist even when comparing the Top 1% with other high-income groups. Together, these findings suggest that the Top 1% is a distinct group with preferences for redistribution that differ from the rest of society, even from other high-income groups.
Presented at: 2022 IIPF, 2025 ECINEQ conference.
Coverage from La Diaria, Canal 5, TV Ciudad, Radio Sarandi
(with Sarah Robinson and Alisa Tazhitdinova)
Abstract: We study how U.S. state personal and corporate income taxes have affected pre-tax income inequality (income shares and top incomes) during the last century. The long panel nature of our data, from 1917 to 2018, allows us to study the effect of tax adoptions, tax cancellations, and tax changes, and to assess both immediate and long-term relationships. With event study and synthetic control designs, we generally find no statistically significant relationship between tax measures and inequality. Some of our point estimates, and also two-way fixed effects analysis, suggest that higher income taxes may reduce top incomes and income shares.
Presented at: 2023 All-California Labor Economics Conference, 2023 NTA meetings, 2025 RIDGE forum, 2025 ECINEQ conference, Fall 2026 NBER Economic Analysis of Business Taxation, and Claremont McKenna AERG.
Who Benefits from Food Tax Exemptions in Lower-income Settings? Evidence on Pass-through and Incidence [WP cooming soon!]
(with Christopher Hoy and Ruggero Doino)
Abstract: Tax exemptions for basic items exist worldwide, typically justified by governments as a way to reduce the cost of living for poorer households. We study the unanticipated removal of consumption taxes on selected food items in Papua New Guinea by conducting a difference-in-differences analysis using administrative data, a supermarket price census, web-scraped online prices, and a nationally representative household phone survey panel. We find complete pass-through in formal supermarkets in central urban districts, where retail competition is strong, but no pass-through in informal stores or rural areas, where poorer households mainly shop. Only 16 percent of the foregone revenue accrued to the poorest two quintiles, while the richest two quintiles and stores/wholesalers each captured almost 40 percent of the benefits. This degree of regressivity and variation in pass-through was unanticipated by 237 experts who participated in a prediction survey. Using a static MVPF-style comparison, we show that universal cash transfers would generate roughly two and a half times as much Q1-weighted value per fiscal dollar as the tax exemption. Our findings demonstrate that food tax exemptions are inherently regressive in lower-income settings, due to high informality, substantial market segmentation, and positive income elasticity of demand for basic food.
Presented at: