Apr 23, 2010

Do football players choose to play where taxes are lower?

Last November we blogged about the possible repeal of Spain's "Beckham's law", a flat 25% tax rate on the super wealthy. Real Madrid and other spanish teams were complaining against the repeal, arguing they would lose this locational advantage to attract talent. But do tax rates really determine where players choose to play? Apparently, yes. A new paper by Emmanuel Saez says it matters a lot, and it even translates into significant effects in the performance of football clubs across countries.

By the way, Saez is last year's Clark Medalist. This year's winner is to be announced later today, with Esther Duflo, a randomista, being the clear favourite.

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