TY - JOUR AU - Akcigit, Ufuk AU - Baslandze, Salomé AU - Stantcheva, Stefanie TI - Taxation and the International Mobility of Inventors JF - National Bureau of Economic Research Working Paper Series VL - No. 21024 PY - 2015 Y2 - March 2015 DO - 10.3386/w21024 UR - http://www.nber.org/papers/w21024 L1 - http://www.nber.org/papers/w21024.pdf N1 - Author contact info: Ufuk Akcigit Department of Economics University of Chicago 1126 East 59th Street Saieh Hall, Office 403 Chicago, IL 60637 E-Mail: uakcigit@uchicago.edu Salomé Baslandze Einaudi Institue for Economics and Finance (EIEF) Via Sallustiana 62 Rome 00187 Italy E-Mail: baslandze.salome@gmail.com Stefanie Stantcheva Department of Economics Littauer Center 232 Harvard University Cambridge, MA 02138 Tel: 617-496-2614 E-Mail: sstantcheva@fas.harvard.edu M2 - featured in NBER digest on 2015-06-02 AB - This paper studies the effect of top tax rates on inventors' international mobility since 1977. We put special emphasis on “superstar” inventors, those with the most abundant and most valuable patents. We use panel data on inventors from the United States and European Patent Offices to track inventors' locations over time and combine it with international effective top tax rate data. We construct a detailed set of proxies for inventors' counterfactual incomes in each possible destination country including, among others, measures of patent quality and technological fit with each potential destination. Exploiting the differential impact of changes in the top tax rate on inventors of different qualities, we find that superstar top 1% inventors are significantly affected by top tax rates when deciding where to locate. The elasticity to the net-of-tax rate of the number of domestic superstar inventors is relatively small, around 0.03, while the elasticity of the number of foreign superstar inventors is around 1. Inventors who work in multinational companies are more likely to take advantage of tax differentials. On the other hand, if the company of an inventor has a higher share of its research activity in a given country, the inventor is less sensitive to the tax rate in that country. ER -