Capital vs. Labor: the Effect of Income Sources on Attitudes Towards the Top 1 Percent. 2023, with Oscar Barrera
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We examine the impact of providing information on the income of the top 1% earners on attitudes towards this group. We focus on the income at the top derived from capital and labor, an aspect scarcely studied in previous literature. We carried out a randomized online survey with 2000 French respondents. Our findings reveal that, at the baseline, respondents have no priors on the capital versus labor shares of the top 1% earners. Additionally, providing quantitative information on the income sources at the top leads to more negative attitudes toward top earners, particularly among left-wing and egalitarian respondents.
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The Effects of a Value Added Tax Hike at an International Border, Evidence from Mexico. 2021, with Cristobal Domínguez
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This research studies the effects of a value-added tax (VAT) reform that raised the rate from 11 to 16 percent at localities close to international borders in Mexico. Using difference-in-differences, we find that the VAT hike increased prices by one-third the size of the full pass-through counterfactual. Moreover, we find that workers absorbed part of the VAT hike, as the reform had a negative effect on workers' compensation. Competition across the border appears to drive the effects we find, as the products most consumed by cross-border shoppers had no price increases, while the least consumed experienced the highest increases.
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R&D Subsidies and Private R&D in a Developing Economy.
This research studies the effects of research and development (R&D) subsidies in Mexico with a regression discontinuity design. Estimates suggest that the subsidies had small or no effects across different measures of R&D activity.
The effects of an oil price shock on economic activity and tax collection. [with Gerardo Juárez and Irvin Rojas]
We use a syntethic control estimation to study the effect of the 2014 oil price shock on economic activity of Mexico's oil-producing States. Preliminary estimates suggest that the oil price shock significantly reduced economic activity and tax collection in the main oil producers.
Responses to asymetric VAT changes in border regions. [with Aldair Rivas and Irvin Rojas]
We study the effects of VAT cuts and hikes in a border region using a differences-in-differences strategy. Preeliminary findings suggest that prices respond symetrically to cuts and hikes in this region. Changes in prices appear to affect poverty rates in the region.
The effects of cadastre modernization on local state capacity and development. [with María Montoya-Aguirre and Guillermo Woo-Mora]
We study the effects of federel government grants aimed at modenizing local cadaters on local property tax collection.
Published Research
Estimating Top Income Shares Without Tax Return Data: Mexico since the 1990’s. 2018, with Raymundo Campos and Gerardo Esquivel |
This study estimates the income of individuals in the top part of the income distribution in Mexico since 1992. Mexico is the only Organisation for Economic Cooperation and Development country that does not report publicly income from fiscal sources. To circumvent this problem, we use income information from household surveys but adjust the misrepresentation of top earners using national accounts data. We then estimate incomes of the very rich using interpolations based on a Pareto distribution. Once we correct for the misrepresentation of top earners in the survey, we find that the income share of the top decile has increased in the last two decades. Our findings contradict the conclusion that is usually obtained solely from household survey information. We also find that the income share of top‐1% earners in Mexico is close to 25%, making Mexico one of the countries where the rich take the largest share of total income. Moreover, we find that inequality among the rich in Mexico is larger than in most countries where information is available.
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Growth is (Really) Good for the (Really) Rich. 2017, with Raymundo Campos and Gerardo Esquivel |
This paper analyses the relationship between mean income and the income of the rich. Our methodology closely follows that of Dollar and Kraay (Journal of Economic Growth, 2002, 7, 195), but instead of looking at the bottom of the distribution, we focus on the top. We use panel data from the World Top Incomes database, which collects top income data from several countries using tax returns as the raw source. We define the “rich” as earners in the top 10%, 1%, 0.1% and 0.01% of the income distribution. Using data since 1980, we find that economic growth is good for the rich in the sense that the mean income of the top decile of the distribution grows in the same proportion as that of the whole population. However, we also find that the income of earners in the top percentile of the distribution and above grows faster than average income: therefore, economic growth is really good for the really rich. We also find that during economic downturns the average income of top earners responds proportionally less to changes in mean income than during economic expansions. Our results are consistent with the increase in inequality that has been recently observed at the top part of the distribution in many countries, and they are robust to different specifications, country samples and time observations.
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Los Ingresos Altos, la Tributación Óptima y la Recaudación Posible. 2014, with Raymundo Campos and Gerardo Esquivel |
En este artículo estimamos el efecto de un aumento en las tasas impositivas para las personas de mayores ingresos, tomando en cuenta tanto los efectos mecánicos como los conductuales. Utilizamos las técnicas más recientes para estimar los ingresos de los individuos ricos a partir de encuestas de hogares y cuentas nacionales. Por otro lado, hacemos una extensa revisión de la literatura para obtener un rango de valores posible de la elasticidad del ingreso gravable, que mide los efectos conductuales ante cambios en las tasas impositivas. Encontramos que la participación en el ingreso total del 1% más rico de los individuos en México es del 21.3%. México es el país que tiene la mayor participación del ingreso de los ricos en el ingreso total y que los ricos mexicanos tienen un mayor ingreso promedio que sus contrapartes en países similares (como Argentina y Colombia). Las tasas marginales óptimas de impuesto al ingreso para los contribuyentes ricos son mayores que las vigentes en la legislación mexicana. La tasa marginal óptima al ingreso que se encontró en esta investigación fluctúa entre 40 y 60%, con un promedio de 52%. Si se aplicara esta tasa impositiva, se obtendrían ingresos fiscales adicionales por alrededor de 0.3% del PIB, un aumento de casi el 7% en los ingresos por impuestos directos.
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