Tax-Induced Emigration: Who Flees High Taxes? Evidence from the Netherlands.

<jats:p>We study a policy change in the Netherlands that unexpectedly reduced the duration of preferential tax treatment for high-skilled migrants from specific countries. Using administrative data, we document substantial out-migration responses driven entirely by the top 1% of earners, with no detectable response below the 95th percentile. Among the 95-99th percentile, previously internationally mobile workers also leave sooner, particularly to countries offering tax breaks, consistent with tax shopping behavior and pointing to distortionary effects of international tax competition. Increased tax intake from remaining workers offsets revenue lost from departing high earners, making the policy fiscally cost-neutral.</jats:p>