ITO Research Roundup
ITO Research Roundup
Weekly summaries of recent studies and posts relevant for our work
Brought to you by Matt and Claude Code
📅 March 09, 2026
🏢 Multinational Taxation
🔍 Tax Evasion & Administration
- An IMF primer explains that over 70 developing economies collect less than 15% of GDP in tax revenue, but well-designed reforms could raise an additional 4–5 percentage points, as demonstrated by Jamaica, Rwanda, and Morocco.[IMF F&D | web]
- Machine learning audit targeting in Pakistan generates Rs 285,000 (~$2,800) net revenue per audit, while the real-world program lost Rs 173,000 (~$1,700) per audit—and targeting based on long-run deterrence outperforms targeting based on immediate revenue recovery.
[Tulane WP 2603 | web] - A JEL review argues that reforms to tax administration’s organizational structure, personnel management, and task management—complemented by efforts to build state legitimacy—can raise tax capacity in developing countries beyond what information trails alone achieve.[JEL 2026 | PDF]
- IMF microsimulations show that tax exemptions and fuel subsidies in Comoros are regressive, disproportionately benefiting higher-income households, highlighting the need for better-targeted redistribution.
[IMF SIP 2026/016 | PDF]
🌿 Tax & Environment
💎 Wealth Taxation
- Eliminating dividend taxes while raising the corporate income tax to keep investment unchanged would increase total tax revenue by 0.1–0.4% of GDP, since dividend taxes create avoidance distortions that the CIT avoids.[THEMA WP 2026-02 | PDF]
- Swiss private wealth reached 4.2× GDP with the top-1% share rising from 37% to 45% since 2003, while effective inheritance tax rates fell by a factor of three as cantons abolished bequest taxes for direct descendants.
[E4S White Paper | PDF]
📊 Other Tax
- As AI displaces human labor, consumption taxation emerges as the primary revenue instrument; if autonomous AGI systems eventually absorb resources directly, even consumption taxes become inadequate and taxing AGI becomes an optimal harvesting problem.[Brookings WP | PDF]
- Germany’s temporary three-percentage-point VAT cut in the second half of 2020 increased aggregate consumption spending by 4.4%, with the strongest response among households who perceived full pass-through to prices.
[CRC TR 224 DP 728 | PDF]
🔧 Methods
- An IMF team uses GPT-4.1 to build the first global quarterly database of discretionary spending shocks for 64 countries (1952–2023), estimating a median government spending multiplier of 0.7 with larger effects in less open economies and during downturns.[IMF WP 26/43 | PDF]
- Forensic methods including satellite imagery, mirror trade data, price monitoring, and refugee surveys can extract credible economic information from “black hole” economies like North Korea where official statistics are unavailable.
[VoxDev | web]
📅 February 23, 2026
🏢 Multinational Taxation
- Japanese multinationals reduce related-party export prices as tax differentials widen, but country-by-country reporting had no effect on transfer mispricing.
[CIRJE DP F-1266 | PDF] - Higher corporate tax rates boost productivity growth for frontier firms but slow catch-up for less productive firms, challenging the conventional linear negative view of business taxation.[arqus DP 310 | PDF]
- MNE profit shifting to tax havens causally reduces domestic employment by 6%, concentrated among high-skilled workers who are relocated to justify tax-minimizing intra-firm payments.[CESifo WP 12464 | PDF]
🔍 Tax Evasion & Administration
- UK tax-benefit policy protected low-income households during 2019-2023 crises, while frozen income tax thresholds created fiscal drag that reduced real living standards across the rest of the distribution.
[CeMPA WP 1/26 | PDF] - A one percentage point VAT increase reduces firm-level employee costs by 3.9% and country-level wages by 2.8%, with small firms and young workers hit hardest.[arqus DP 311 | PDF]
- Higher-income taxpayers’ larger behavioral responses to top-bracket tax changes reflect tax salience rather than higher substitution elasticities, implying greater revenue potential from progressive rate structures.
[NBER WP 34731 | PDF]
💎 Wealth Taxation
📊 Other Tax
- Auckland fuel prices passed through a regional fuel tax nearly symmetrically on average, but stations near competitors under different tax regimes showed sticky-downward pricing after repeal.
[Waikato WP 1/26 | PDF] - As AI erodes labor income and consumption tax bases, optimal taxation shifts toward consumption taxes in a post-labor economy and eventually to taxing autonomous AGI capital at the human discount rate.[NBER WP 34873 | PDF]
🔧 Methods
- EarlyReview, a new screening tool for pre-analysis plans, finds that the average PAP on the AEA registry passes only 80% of quality checks, with multiple hypothesis testing procedures most often unspecified.[web]
- The GABRIEL software package validates GPT as an accurate and direct measurement tool for quantifying attributes in qualitative data, performing indistinguishably from human annotators across 1000+ tasks.[NBER WP 34834 | PDF]
📅 February 09, 2026
🏢 Multinational Taxation
- Panel data on 150 MNEs (2018-2023) shows tax-minimizing strategies boost firm value, but only firms with strong governance sustain the gains — tech firms face the highest regulatory risk from aggressive planning.[Public Finance | PDF]
- Vietnam experienced genuine trade reallocation rather than rerouting after US-China tariffs, increasing domestic value added in exports by up to 12pp, partly driven by Chinese firms relocating production via FDI.
[CEPR VoxEU | web] - New JRC top-down methodology estimates EU corporate income tax gaps ranging from below 3% to above 35% across member states, with an average gap of 10.9% (EUR 38 billion in 2017), concentrated in cash-intensive sectors.
[Public Economics | PDF] - Calibrated model shows the 15% global minimum tax induces tax havens to adopt split rates — taxing large MNEs at 15% while cutting rates for smaller firms — yielding 36bn in global revenue gains but concentrated in non-haven countries.[Public Finance | PDF]
- After ICIJ offshore data leaks, implicated firms appointed more directors in audit and finance roles, paid higher dividends, and reduced tax haven presence — without raising effective tax rates — in a net-positive reputational repair for shareholders.[CEPR | PDF]
- Quantitative model shows the 2017 US TCJA generated positive spillovers abroad (raising EU GDP by 0.2%), while a GMT adopted outside the US creates negative inward spillovers for the US even when American MNEs are exempt.
[Public Economics | PDF] - EU country-by-country reporting raised large multinationals’ effective tax rates by 1-2pp, reducing their consolidated sales by 5% and lowering industry concentration in sectors where top firms were affected. [Public Economics | PDF]
- Costa Rica’s elimination of tax holidays for new free-zone investors provides causal evidence that investment promotion agencies can sustain FDI inflows even after generous tax incentives are removed.
[Journal of Development Economics | web] - Chilean transfer pricing reform failed to reduce profit shifting or raise tax payments, but dramatically increased demand for transfer pricing consultants, illustrating how enforcement complexity benefits the advisory industry.
[CEPR | PDF] - Managers from countries with one SD more progressive gender norms reduce their team’s gender pay gap by 5pp (18%), primarily through higher promotion rates for women, with effects persisting after the manager rotates out.[NBER | PDF]
🔍 Tax Evasion & Administration
- Centralizing tax audits in six Chinese provinces improved audit quality by reducing local influence, though at the cost of local knowledge.
[NBER | web] - Malthusian growth model shows early states’ tax capacity exhibits an inverted-U effect on population: moderate taxation funds productive public goods and drives expansion, but overtaxation leads to collapse and defeat by rival states.[Public Economics | PDF]
- Multiple tax audits in Uganda increase VAT liabilities by UGX 362 million among consistent filers, while single audits have no significant effect, highlighting the importance of repeat enforcement interactions.
[Public Economics | PDF] - Estimates Spain’s personal income tax gap for 2003-2022, finding evasion concentrated among self-employment and capital income with underreporting as the dominant form of noncompliance.
[Informal & Underground Economics | PDF] - Successful tax reform requires concurrent tax administration reform that goes beyond enforcement to include taxpayer services, trust-building, and new technologies.[Public Economics | PDF]
- Belgium’s 2016 payroll tax exemption for first hires sharply increased one-worker firms by 10%, but most new employers lacked the productivity to grow beyond a single employee.
[Public Finance | PDF] - Economists’ tax policy recommendations routinely fail politically because they ignore broadly defined distributional effects–who wins and who loses–that drive how people and their representatives vote.[Public Economics | PDF]
- Review synthesises evidence that tax administration reforms–organisational structure, personnel management, task design, and state legitimacy–can raise tax capacity in developing countries beyond what information trails alone achieve.
[Manual | PDF] - Panel data across four developing countries (2005-2023) shows higher effective tax rates reduce SME performance, while targeted tax incentives and quality public services promote formalisation and growth.[Informal & Underground Economics | PDF]
- Survey experiment with 1,200 respondents in Bangalore finds corruption cues reduce willingness to disclose tax evasion and shift preferences toward indirect taxation, even though tax morale itself remains unchanged.
[Public Economics | PDF] - U.S. teleworkers are more likely to move interstate and realize larger state tax savings from moves–up to 2,970 for top earners vs. ,566 for non-teleworkers–strengthening the case for residence-based income taxation. [Public Finance | PDF]
💸 Illicit Financial Flows & Real Estate
- A CGE model shows that cutting informal taxes–bribes, illegal fees, and extortion–in developing countries yields significant GDP and welfare gains economy-wide.[Informal & Underground Economics | web]
- An Oxford study finds Dubai, Singapore, and Hong Kong are replacing traditional Western offshore havens for African elites, with Dubai handling 95% of illegal gold from East and Central Africa.[ICIJ Blog | web]
- ICIJ investigation reveals crypto ATM scams surged 99% in 2024, with 33 million lost by November 2025; Iowa found over half of Bitcoin Depot transactions were scam-related. [ICIJ Blog | web]
- CEPR’s Richard Portes warns that multi-issuer stablecoins pose systemic risk to Europe, as US holders could use EU regulation to claim European reserves in a crisis. [CEPR VoxEU | web]
- Ransomware attacks on US hospitals increased in-hospital mortality by 34-38% for patients admitted when attacks began, causing an estimated 69-76 Medicare deaths between 2016-2021. [Manual | PDF]
- Model of tax evasion in a corrupt economy shows that firms use bribes to reduce tax payments, creating reinforcing dynamics between corruption and revenue loss.[Informal & Underground Economics | web]
🌿 Tax & Environment
- Examines how CO2 emission regulation mechanisms interact with generation allocation and renewable energy certificates to affect overall carbon emissions.[Journal of Development Economics | web]
- OECD analysis of 49 countries finds carbon leakage rates average 14% overall, with carbon taxes raising import emission intensity while technology subsidies and regulations produce cleaner imports, suggesting policy mixes can limit leakage.[CEPR VoxEU | web]
💎 Wealth Taxation
📊 Other Tax
- Regression discontinuity analysis of France’s salt tax and customs borders shows heavier indirect taxation drove pre-revolutionary unrest, peaking in the 1780s, and predicted deputies’ support for abolishing the monarchy.
[NBER | PDF] - Using the MVPF framework for Finland, top marginal income tax rates above 55% are self-defeatingly high, while VAT and inheritance taxes impose the least welfare cost per euro raised.
[Public Finance | PDF] - Incorporating loss aversion around institutional income thresholds into a Mirrlees optimal tax model raises optimal marginal rates globally and increases the optimal lump-sum transfer by 19-32% in U.S. calibrations. [Public Finance | PDF]
- Lithuania, Latvia, and Estonia imposed windfall profit taxes on banks after the 2022-2023 monetary tightening cycle, which rapidly boosted floating-rate loan income while deposit rates lagged, widening spreads by up to 2.8 percentage points above the euro area.
[Public Economics | PDF] - Examines informal fiscal systems in developing countries — non-state taxation and service provision — and their interaction with formal state institutions.[Journal of Development Economics | web]
- India invoked the UN’s existing statistical definition of illicit financial flows at convention negotiations, affirming that aggressive tax avoidance by multinationals qualifies and challenging OECD resistance to the term. [Tax Justice Network | web]
- Revenue instability in OECD countries owes more to the correlation structure among tax sources than to reliance on individually volatile taxes, with non-economic factors also playing a significant role.[Public Finance | PDF]
- Mobile money taxes can backfire by pushing users away from formal digital payments, undermining financial inclusion and reducing transaction volumes in developing economies.[VoxDev | web]
- Fuel tax pass-through in a large metropolitan city does not vary with the number of nearby competitors, suggesting the entire metro area functions as a single geographic market and challenging standard isodistance-based market definitions.[CEPR | PDF]
- Targeted payroll tax reductions have limited effects on employment and wages, suggesting that narrowly designed hiring subsidies may not achieve their intended labor market outcomes.[Economic Journal | web]
- A French survey experiment (N=12,600) finds that removing tax credits reduces charitable donations but not political ones, while government matching increases giving amounts but lowers the share of people who donate to charities. [CEPR | PDF]
- Ending sales tax exemptions on soda and candy across five US states reduced purchases only when tax hikes exceeded five percentage points, with stronger responses for soda than candy and effects that grew over time. [Public Economics | PDF]
- Irish income tax policy changes since 2011 have had notable fiscal and distributional implications, reshaping the system’s progressivity and revenue capacity.
[Public Economics | web]