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Laila Aït Bihi Ouali (GREQAM-AMSE) – "Top income tax evasion and preferences for redistribution – Evidence from the Panama Papers"
Time: 12:30 pm – 1:30 pm
Date: 19th of April 2018
Place: Room 3001.
Laila Aït Bihi Ouali (GREQAM-AMSE) – “Top income tax evasion and preferences for redistribution – Evidence from the Panama Papers”
Abstract: This paper provides empirical evidence that, after fiscal scandals, individuals substantially revise their views on redistribution. I use the 2016 Panama Papers scandal which revealed top-income households’ tax avoidance: this scandal, unanticipated and leaked simultaneously worldwide through various media, generates a quasi-experimental framework. The empirical strategy exploits the timing of longitudinal UK survey data (British Election Study). It resorts to a difference-in-differences methodology where uninformed individuals are used as controls. First, I find that the preference for top-income redistribution strongly and abruptly increases post-scandal, with an increase between 9 and 14 ppt in agreement with a series of statements indicating preferences for redistribution. This suggests that leaks can be interpreted as sudden tax avoidance signals from which individuals extract information. This update of redistribution preferences is moderately translated into votes. More precisely, there are not effects on right-wing votes and an increase in stated voting intentions for the left. This indicates the leak triggers a greater polarization, but individuals’ declared certainty towards their decision is smaller. Additional data shows consistency at the European level.
Antoine Bertheau (CREST – ENSAE), Clémence Lenoir (CREST – ENSAE) & Alicia Marguerie (CREST – Polytechnique)