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ALISA TAZHITDINOVAAssistant Professor of Economics at UC Santa Barbara
Faculty Research Fellow at the National Bureau of Economic Research My research interests are in public economics, labor economics, and psychology and economics. Contact Information:
Department of Economics, UCSB 2127 North Hall, Santa Barbara, CA 93106-9210 Email: tazhitda [at] ucsb.edu |
How to pronounce my last name? "tah-zheet-DEE-noh-vah," where "zh" is pronounced as "s" in "leisure"
PUBLICATIONS:
"Increasing Hours Worked: Moonlighting Responses to a Large Tax Reform"
American Economic Journal: Economic Policy 2022, 14(1): 473-500. Publisher's Link NBER Working Paper 27726
"Do Value-Added Taxes Affect International Trade Flows? Evidence from 30 Years of Tax Reforms,"
(with Youssef Benzarti), American Economic Journal: Economic Policy 2021, 13(4): 469-489. Publisher's Link NBER Working Paper 26195
"Are Changes of Organizational Form Costly? Income Shifting and Business Entry Responses to Taxes"
Journal of Public Economics 2020, volume 186 (June), 104187. Publisher's Link Slides
"Do Only Tax Incentives Matter? Labor Supply and Demand Responses to an Unusually Large and Salient Tax Break"
Journal of Public Economics 2020, volume 184 (April), 104162. Publisher's Link Winner of the 2016 IIPF Peggy and Richard Musgrave Price
"Reducing Evasion Through Self-Reporting: Evidence from Charitable Contributions"
Journal of Public Economics 2018, volume 165 (September), pp. 31-47. Publisher's Link Slides
WORKING PAPERS:
"Permanent and Transitory Responses to Capital Gains Taxes: Evidence from a Lifetime Exemption in
Canada"
(with Adam Lavecchia) NBER Working Paper 28514 Non-technical summary Slides
Using panel data on a 20% random sample of Canadian taxpayers, we study behavioral responses to the cancellation of a lifetime capital gains exemption that resulted in increased capital gains taxation for some individuals. The unique setting allows us to distinguish between short-term avoidance responses and permanent responses to capital gains taxes. We show that the exemption did not change the number of taxpayers reporting positive capital gains, and thus unlikely resulted in increased participation in capital markets. However, the exemption cancellation slightly increased capital gains realizations of the existing traders.
Using panel data on a 20% random sample of Canadian taxpayers, we study behavioral responses to the cancellation of a lifetime capital gains exemption that resulted in increased capital gains taxation for some individuals. The unique setting allows us to distinguish between short-term avoidance responses and permanent responses to capital gains taxes. We show that the exemption did not change the number of taxpayers reporting positive capital gains, and thus unlikely resulted in increased participation in capital markets. However, the exemption cancellation slightly increased capital gains realizations of the existing traders.
"What Drives Tax Policy? Political, Institutional and Economic Determinants of State Tax Policy in the Past 70 Years"
(with Sarah Robinson)
We study U.S. state tax rules over the past 70 years to shed light on the determinants of U.S. state tax policy, generating three key results. First, we show that long-term tax trends are not consistent with Tiebout sorting and race-to-the-bottom competition models. Second, we document evidence of increasing polarization of tax rates between Democratic and Republican states in 1970s and from 2000 onward. Third, we use machine learning techniques to show that the timing and magnitude of tax changes are not driven by federal changes, economic needs, state politics, institutional rules, neighbor competition, or demographics. Altogether, these factors explain less than 20% of observed tax variation.
We study U.S. state tax rules over the past 70 years to shed light on the determinants of U.S. state tax policy, generating three key results. First, we show that long-term tax trends are not consistent with Tiebout sorting and race-to-the-bottom competition models. Second, we document evidence of increasing polarization of tax rates between Democratic and Republican states in 1970s and from 2000 onward. Third, we use machine learning techniques to show that the timing and magnitude of tax changes are not driven by federal changes, economic needs, state politics, institutional rules, neighbor competition, or demographics. Altogether, these factors explain less than 20% of observed tax variation.
"Does Independent Political Spending Affect State Tax Policies, Revenues and Expenditures?"
(with Sarah Robinson)
We study to what extent U.S. state tax policy, tax revenues and expenditures are affected by independent political contributions. Using the Citizens United v. Federal Election Commission ruling for identification, we study tax policy outcomes in states where independent spending by corporations and/or unions on political campaigns was suddenly allowed, compared to unaffected states. Ten years after the ruling and for a wide range of outcomes, we are not able to identify economically or statistically significant effects of unlimited independent political contributions on tax outcomes. While our results do not rule out the possibility of changes in tax handouts on a firm-by-firm basis, such effects are not large relative to the regular fluctuations of state tax rates, revenues or expenditures.
We study to what extent U.S. state tax policy, tax revenues and expenditures are affected by independent political contributions. Using the Citizens United v. Federal Election Commission ruling for identification, we study tax policy outcomes in states where independent spending by corporations and/or unions on political campaigns was suddenly allowed, compared to unaffected states. Ten years after the ruling and for a wide range of outcomes, we are not able to identify economically or statistically significant effects of unlimited independent political contributions on tax outcomes. While our results do not rule out the possibility of changes in tax handouts on a firm-by-firm basis, such effects are not large relative to the regular fluctuations of state tax rates, revenues or expenditures.
"Labor Supply Responses to Payroll Taxes in the UK"
I study behavioral responses to changes in marginal tax rates of social security and income taxes. I find that responses depend on individual’s employment status: whether a worker is a wage earner, self-employed, or a proprietor. In line with the existing literature I document weak (but statistically significant) bunching at kink points of the tax schedule among wage earners. Starting from 1999, wage earners accumulate pension credits when they exceed a certain threshold, however, no contributions are due until earnings reach a second, higher threshold. Even 10 years after this reform I find no bunching to the right of the eligibility threshold, suggesting that individuals do not assign a high value to pension benefits. Lack of bunching is persistent across age groups and unlikely to be explained by friction costs as individuals are able to bunch at other kink points. I find strong responses to tax incentives among the self-employed but the responses differ by the type of kink. I find sharp bunching at the first kink, medium bunching at the top kink and weak bunching at the middle kink. Comparing responses before and after a tax reform that changed the magnitude of kinks I find that self-employed individuals aggressively reduce earnings to bunch at the lower, more salient kink points. Finally, I document large income shifting by proprietors: many firm owners report most of income as dividends thus avoiding social security taxes. Nevertheless many proprietors choose to pay themselves sub-optimally high wages thus incurring an unnecessarily high tax liability. I show that some of these proprietors pay multiples of £5,000 or £6,000.
