Should remittances be taxed or subsidized?

John Wilson ()

International Tax and Public Finance, 2012, vol. 19, issue 4, 539-553

Abstract: This paper analyzes the optimal nonlinear schedule of taxes and subsidies on remittances from emigrants. The analysis identifies conditions under which emigrants remitting small amounts of income face positive average and marginal subsidies on their remittances, whereas emigrants remitting relatively large amounts of income face positive marginal taxes. In this way, the tax system improves the distribution of income by indirectly taxing the “brain drain,” while simultaneously encouraging remittances that tend to go to low-income residents. Copyright Springer Science+Business Media, LLC 2012

Keywords: Brain drain; Remittances; Optimal taxation; Emigration; H21; H87; O24 (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1007/s10797-012-9237-9

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