Ethnicity and Tax Filing Behavior

16 Pages Posted: 20 Nov 2019 Last revised: 4 Mar 2021

See all articles by Spencer Bastani

Spencer Bastani

IFAU - Institute for Labour Market Policy Evaluation; Linnaeus University - Department of Economics and Statistics; Research Institute of Industrial Economics (IFN)

Thomas Giebe

Linnaeus University - Department of Economics and Statistics

Chizheng Miao

Linnaeus University - Department of Economics and Statistics

Multiple version iconThere are 2 versions of this paper

Date Written: November 9, 2019

Abstract

We analyze differences in tax filing between natives and immigrants, focusing on two empirical examples. First, we study deductions for costs associated with traveling between home and work allowed in the Swedish tax code. Using the total population of commuters within Sweden's largest commuting zone, we find that newly arrived immigrants file substantially less than natives, immigrants with a longer stay behave more like natives, and immigrants with the longest stay file the most, even more than natives. Second, we analyze bunching behavior among the self-employed at a large salient kink point of the Swedish income tax schedule. We find much less bunching among immigrants, even after a long time in the host country, and the largest differences relative to natives in residential areas with a high immigrant concentration. Our findings have implications for the equity and efficiency of the tax system and the spatial patterns of residential and occupational choices for different ethnic groups.

Keywords: deductions, tax filing, bunching, immigrants, natives, integration

JEL Classification: D31, H21, H24, H26, J22, J61, R23

Suggested Citation

Bastani, Spencer and Giebe, Thomas and Miao, Chizheng, Ethnicity and Tax Filing Behavior (November 9, 2019). Journal of Urban Economics, Vol 116, Forthcoming , Available at SSRN: https://ssrn.com/abstract=3484019

Spencer Bastani

IFAU - Institute for Labour Market Policy Evaluation ( email )

Box 513
751 20 Uppsala
Sweden

Linnaeus University - Department of Economics and Statistics ( email )

Växjö, 351 06
Sweden

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Thomas Giebe (Contact Author)

Linnaeus University - Department of Economics and Statistics ( email )

Växjö, 351 06
Sweden

Chizheng Miao

Linnaeus University - Department of Economics and Statistics ( email )

Växjö, 351 06
Sweden

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