Does weak enforcement deter tax progressivity?
利用意大利一项加强税收执法的政策，研究发现更严格的执法促使地方政府提高中高收入者的边际税率、降低低收入者税率，从而增强了税收累进性，并增加了公共支出。
In contexts with weak enforcement, the threat of tax evasion may constrain policy makers’ power to set tax policies optimally. This paper studies whether stricter tax enforcement affects the tax schedule set by local governments. I take advantage of an Italian policy that generated cross-municipality variation in the scope for tackling income and property tax evasion through stricter tax enforcement. Combining an event-study design with municipality-level panel data on statutory tax rates, I show that stricter tax enforcement tips the balance in favor of higher marginal tax rates for middle and top incomes, while the poor benefit of a lower marginal tax rate. The tax hike is larger in places with higher pre-program inequality and where intrinsic tax compliance attitudes are weaker. As a result of higher tax revenue, municipalities hire more workers and raise public spending. These results suggest that tax enforcement policies have not only the power to foster tax capacity, but also to enhance the ability to pursue redistributive policies.