New Research on Regulating the Economy
Paper Session
Saturday, Jan. 7, 2023 10:15 AM - 12:15 PM (CST)
- Chair: Nathaniel Hendren, Harvard and NBER
The Offshore World According to FATCA
Abstract
This paper provides a descriptive account of the offshore financial wealth reported by foreign financial institutions to the IRS under the Foreign Accounts Tax Compliance Act (FATCA). These data provide unprecedented, direct visibility into the offshore holdings of Americans. We find that FATCA reporting sheds light on at least $3.9 trillion in offshore wealth owned by 1.5 million US individuals and entities. We match about one third of this wealth, including most wealth held in tax havens and most of the largest accounts, to US partnership owners, though partnerships only own 1.9% of accounts. We match 16% of wealth and 58% of accounts to individual owners, while we cannot confidently link 38% of the wealth and 39% of accounts to a US tax filer due to missing Taxpayer Identification Numbers and other issues. Unmatched wealth mainly comprises non-haven wealth; less than 10% of tax haven wealth is unmatched. Linking partnerships to individual owners and combining this with directly held individual wealth, we find that the ownership of offshore wealth is extremely concentrated and prevalent at the top of the individual income distribution. Almost 50% of matched individual and partnership offshore wealth belongs to the top 1% of the income distribution, and over 80% of matched partnership wealth belongs to the top 1%. Over 20% of individuals in the top 1% and over 60% of individuals in the top 0.01% of the income distribution have an interest in an offshore account.Air Pollution and Economic Opportunity in the United States
Abstract
Neighborhoods are an important determinant of economic opportunity in the United States. Less clear is how neighborhoods affect economic opportunity. Here we provide early evidence on the importance of environmental quality in shaping economic opportunity. Combining 36 years of satellite derived PM2.5 concentrations measured over roughly 8.6 million grid cells with individual-level administrative data provided by the U.S. Census Bureau and Internal Revenue Service (IRS), we first document a new fact: early-life exposure to particulate matter is one of the top five predictors of upward mobility in the United States. Next, using regulation-induced reductions in prenatal pollution exposure following the 1990 Clean Air Act Amendments, we estimate significant increases in adult earnings and upward mobility. Combined with new individual-level measures of pollution disparities at birth our estimates can account for up to 20 percent of Black-White earnings gaps, and 25 percent of the Black-White gap in upward mobility estimated in Chetty et al. (2018). Combining our estimates with experiment-induced reductions in pollution exposure from the Moving to Opportunity (MTO) experiment, we can account for 16 percent of the total neighborhood earnings effect estimated in Chetty, Hendren, and Katz (2016). Collectively, these findings suggest that environmental injustice may play a meaningful role in explaining observed patterns of racial economic disparities, income inequality and economic opportunity in the United States.The Heterogeneous Welfare Impacts of Tax Audits
Abstract
We provide novel, comprehensive estimates of the return to tax audits across the income distribution. We then embed these estimates within the Marginal Value of Public Funds framework in order to estimate the welfare effects of tax audits.JEL Classifications
- H00 - General