LAWRENCE ZELENAK, Duke University School of Law
Email: aclark@law.duke.edu

This essay examines some of the difficulties of understanding public opinion on taxes, and offers some suggestions as to how the conscientious legislator might proceed in light of those difficulties. The essay begins by describing two contexts in which public opinion appears to contradict itself, and suggests how the apparent contradictions might be resolved. It then offers three suggestions for the conscientious legislator whose goal is to discern (rather than to manipulate) public opinion on taxes - to be neither unduly optimistic nor despairing about the potential for educating the public on tax policy issues, to understand and guard against the manipulation of public opinion by those with particular tax policy agendas, and to be guided by opinion surveys which give the public a range of policy options rather than forcing a choice between two polar positions.

CHRISTOPH A. SCHALTEGGER, University of St. Gallen - CREMA
Email: Christoph.Schaltegger@estv.admin.ch
FRANK SOMOGYI, ETH Zurich, KOF Swiss Economic Institute
Email: somogyi@kof.ethz.ch
JAN-EGBERT STURM, KOF, ETH Zurich, CESifo (Center for Economic Studies and Ifo Institute for Economic Research)
Email: sturm@kof.ethz.ch

In this paper, we provide empirical evidence for the influence of income taxes on the choice of residence of taxpayers at the local level. The fact that Swiss communities can individually set tax multipliers thereby shifting the progressive tax scheme which is fixed at the cantonal (state) level enables us to study the effect of differences in income taxation on individuals’ choice of location within an economically and culturally homogeneous region. Using panel IV regressions covering the years 1991-2003 and 171 communities in the Swiss canton of Zurich and spatial error regressions for the 171 communities in 2003, we find substantial evidence for income sorting.

VIOLETA RUIZ ALMENDRAL, Universidad Carlos III de Madrid, Spain
Email: violeta.almendral@uc3m.es

The so-called indirect tax harmonization process, undertaken by the European Court of Justice, and partly fueled by the European Commission, is giving place to a radical transformation of non-resident taxation. The traditional principle derived from international taxation, namely, that residents and non-residents deserve a different treatment as they are not in the same position, is increasingly being challenged by the Court and the Commission. The reasoning logic of the Court is not always easy to follow. However, it is slowly becoming clear that, as a consequence of the interaction and common influence of European tax law and International tax law, a “Statute of the EU-based non-resident� is being created. This means, growingly, that non-residents in a given Member State, that are resident in another, have a distinct regime that profoundly shapes their tax liability. This paper intends to assess the functioning of the said regime, in order to help shed some light in what is increasingly becoming a “tax jungle�, where Member States reform their Tax Codes in order to align them with the latest ECJ resolution, while the little coherence left creates ever new loopholes that have then to be closed, such increasing the complexity of the tax systems. Finally, the article pays particular attention to the Spanish tax on non-residents (Impuesto sobre la renta de no residentes) in order to show the perverse effects of the indirect harmonization of the tax law.