Taxing the Rich to Finance Redistribution: Evidence from a Permanent Tax Increase in Singapore

• 成果类型: Article; Early Access
• 署名作者: Agarwal, Sumit; Qian, Wenlan; Yeung, Bernard; Zheng, Huanhuan
• 署名单位: National University of Singapore; National University of Singapore
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2023.4823
• 发表日期: 2023
• 关键词: income tax; consumption; savings; redistributive policy; fiscal policy

摘要

Based on a representative sample of consumer financial transaction data, this paper studies the consumption and savings response to a 2015 permanent increase in the marginal income tax of the high-income taxpayers. Using difference-in-differences regressions, controlling for individual and time fixed effects, we show robust results that the affected consumers experienced little change in their spending. The pattern is prevalent across consumer demographics and is found even among consumers who are sophisticated, have high levels of debt, or register little income changes. Furthermore, the tax increase financed fiscal redistribution leads to a long-lasting increase in the consumption of the lower-income population.