(with Manon François, Carlos Oliveira, and Gabriel Zucman)
EU Tax Observatory Working Paper #5, 2022
Abstract (click to expand): This paper presents a new way to tax excess profits. We propose to tax the rise in the stock market capitalization of companies that benefit from extraordinary circumstances, such as energy firms following the invasion of Ukraine in February 2022. Targeting the rise in stock market capitalization (which is easily observable) makes the tax much harder to avoid than standard excess profit taxes, and allows to capture rents irrespective of where multinational companies book their profits. We apply this proposal to energy companies that are headquartered or have sales in the European Union. We estimate that taxing the January 2022 to September 2022 valuation gains of energy firms at a rate of 33% would generate around €80 billion in revenue (0.4% of GDP) for the European Union. We discuss implementation practicalities and compare our proposals to other plans made to tax excess profits.
(with Antoine Dechezleprêtre, Adrien Fabre, Tobias Kruse, Ana Sanchez Chico, and Stefanie Stantcheva)
NBER Working Paper #30265 [Revise and Resubmit at the American Economic Review], 2022
Abstract (click to expand): This paper studies how people across the world perceive and understand climate change and climate policies, which factors determine their support for climate action, and what type of information shifts their policy views. We design and run new large-scale surveys on more than 40,000 respondents in 20 countries, covering the major greenhouse gas emitters in developed and developing economies. We thus provide new, comprehensive, international microdata on people's perceptions, understanding, and policy views related to climate change, combined with detailed background information on their socioeconomic characteristics, energy use, and lifestyles. We show that, across countries, support for climate policies hinges on three key perceptions centered around the effectiveness of the policies in reducing emissions (effectiveness concerns), their distributional impacts on lower-income households (inequality concerns), and their impact on the respondents' household (self-interest). In the experimental part, we show randomly selected subsamples pedagogical videos on either the impacts of climate change in their country or how major climate policies work — their effectiveness in reducing emissions and their distributional implications. Explaining how policies work and who can benefit from them is critical to fostering policy support, whereas simply informing people about climate change's impacts is ineffective.
• Website and Online Appendices
• CAE Note
(with Annette Alstadsæter, Gabriel Zucman, and Andreas Økland)
EU Tax Observatory Working Paper #1, 2022
Abstract (click to expand): This paper analyzes a unique micro-dataset capturing the ownership of about 800,000 properties in Dubai. We use this dataset to document patterns in cross-border real estate investments, a blind spot in the analysis of financial globalization. We obtain four main findings. First, offshore real estate in Dubai is large: at least $146 billion in foreign wealth is invested in the Dubai property market. This is twice as much as real estate held in London by foreigners through shell companies. Second, geographical proximity and historic ties are key determinants of foreign investments in Dubai. About 20% of offshore Dubai real estate is owned by investors from India and 10% by investors from the United Kingdom; other large investing countries include Pakistan, Gulf countries, Iran, Canada, Russia, and the United States. These patterns hold when focusing on the most affluent neighborhoods, with the main difference that Indian investments become relatively smaller and Russian investments larger. Third, a number of conflict-ridden countries and autocracies have large holdings in Dubai relative to the size of their economy, equivalent to 5%–10% of their GDP. This suggests that the official net foreign asset position of a number of lowincome economies is significantly under-estimated. Last, by matching properties owned by Norwegians to administrative tax records in Norway, we find that the probability to own offshore real estate rises with wealth, including within the very top of the wealth distribution. About 70% of Dubai properties owned by Norwegian taxpayers were not reported for tax purposes in 2019. These results suggest that the lack of cross-border exchange of information on real estate ownership is a significant issue for tax enforcement.
• Data
Press coverage:
New York Times (March 2022)
, Le Monde (May 2022)
, Süddeutsche Zeitung (May 2022)
, E24 (May 2022)