Working Papers
Fiscal Drag with Microsimulation: Evidence from Spanish Tax Records (Updated version soon)
May 2025.
Abstract: Fiscal drag arises when nominal tax parameters remain unchanged despite nominal income growth, thereby increasing effective tax rates and revenue. We use Spanish administrative tax records and a detailed microsimulation model to examine fiscal drag in personal income taxation through two complementary approaches. First, we estimate tax-to-base elasticities to assess the progressivity of the tax system and potential fiscal drag under homogeneous income growth. We uncover significant heterogeneity in elasticities across income sources, across the individual income distribution and in the underlying mechanisms. Second, we conduct counterfactual simulations to quantify the actual impact of fiscal drag from 2019 to 2023, finding it accounts for about a third of revenue growth. Our findings offer insights for public finance modelling, revenue forecasting, and tax policy design.
In Progress
Preferential Tax Regimes and Personal Income Tax Incidence (with Dirk Foremny)
Corporate Income Taxes and Automation, Evidence from Spain
Book Chapters
Sanctions Against Oligarchs and the Role of a European Asset Register
With Theresa Neef, Panayiotis Nicolaides, Lucas Chancel, Thomas Piketty, and Gabriel Zucman
In L’Europe : du marché à la puissance publique?, E. Monnet & A. Vauchez (Eds.), La Vie des Idées, Collège de France, 2024.
Policy Briefs and Research Notes
Fiscal Drag: the Heterogeneous Impact of Inflation on Personal Income Tax Revenue
Documentos Ocasionales / Banco de España, 2422. [Español]
With Mona Barake, Kane Borders and Enea Baselgia
EU Tax Observatory Policy Note