I am an Assistant Professor of Economics at UCLA, a Faculty Affiliate at the California Center for Population Research and a Faculty Research Fellow at the NBER.
My work lies at the intersection of Public Finance and Behavioral Economics.
You can download my CV here.
Email: benzarti at econ.ucla.edu
Check out my better half's website here.
“How Taxing Is Tax Filing? Leaving Money On the Table Because of Hassle Costs.”
Download: paper and slides
I use a quasi-experimental design and a novel identification strategy to estimate the burden of filing taxes. Employing US income tax returns, I observe how taxpayers choose between itemizing deductions and claiming the standard deduction. Taxpayers forgo tax savings to avoid hassle costs, resulting in an average burden of itemizing of $644 per taxpayer, and suggesting large aggregate filing costs. This burden increases with income, consistent with a higher opportunity cost of time for richer households. I provide evidence consistent with taxpayers procrastinating on filing taxes and estimate that procrastination accounts for 65% of the cost.
Featured in Money
[Revised]"What Goes Up May Not Come Down: Asymmetric Incidence of Value Added Taxes." (with Dorian Carloni (CBO), Jarkko Harju (VATT) and Tuomas Kosonen (LIER))
This paper shows that prices respond more to increases than to decreases in Value Added Taxes (VAT). First, we combine monthly commodity price data with information on VAT rates across several European countries from 1996 to 2015 and show that VAT pass through to prices is asymmetric. Second, using a case study, we show that the underlying distribution of prices is also asymmetric. Our findings caution against using incidence estimates derived in previous studies without accounting for the direction of the tax change and questions the effectiveness of reductions in VAT to achieve redistribution or stimulate economic growth.
"Who Really Benefits From Consumption Tax Cuts? Evidence From a Large VAT Cut in France." (with Dorian Carloni)
This paper estimates the share of the consumption tax burden falling on workers, firm owners and consumers by analyzing the value-added tax (VAT) cut from 19.6 percent to 5.5 percent applied to French sit-down restaurants in July 2009. We use firm-level data and a difference- in-differences framework to show that the reform increased restaurant profits and the cost of employees, and aggregate price data to estimate the decrease in prices produced by the reform. Theoretically, we extend the standard partial equilibrium model of consumption tax incidence defined in Fullerton and Metcalf (2002) to include consumption substitutability between the taxed good and an untaxed good, and markets for production inputs, which we allow to vary with the tax. Empirically, we compare sit-down restaurants to (a) non- restaurant market services and (b) non-restaurant small firms, and find that (1) the effect of the reform on prices is limited, (2) employees bear around 15 percent of the tax eighteen months after the reform, and 20 percent thirty months after the reform, and (3) the reform mostly benefits capital owners, who bear around 50 percent of the tax, both in the short-run and in the long-run.
"Should I Stay Or Should I Go? The Migration Patterns of High-Skilled Workers: Evidence From Alumni Databases."
This paper uses a novel dataset to provide new series on the international migration of high skilled workers educated in France from 1944 to 2012. I use alumni databases to track the location of graduates from leading French post- secondary institutions. The proportion of high skilled individuals working in France has been steadily decreasing from 1944 to 2004. Recent years have seen an increase in the percentage of graduates staying in France in contradiction with the view that high taxes and administrative costs have been leading high skilled workers to leave France.
WORK IN PROGRESS:
"Who Wants to Retire Early? Evidence From Contribution Decisions to an Early Retirement Fund at the Age of 30." (with Mette Trier Damgaard)
This paper uses Danish registry data on the full population to investigate a unique setting. Early retirement benefits in Denmark are provided through an opt-out program. Individuals have to decide - by the age of 30 - if they want to partake in this program. First, we establish that a significant proportion of the population opts out of the early retirement program. This proportion exceeds 50% in the most recent years. This is surprising in light of the fact that the program is very popular among the current and past retiring generations, and that the retirement age has been steadily decreasing all around the world. Second, we investigate what drives the decisions of individuals to opt out of the program. We consider for example how the retirement experience of the one’s parents affects one’s decision to contribute to the plan. Preliminary results suggest that if one’s parents retire early, one is less likely to opt out of the program, but the longer the parents have been retired the more likely one is to opt out.
"Meritocratic Dynasties: Evidence From Exam Results of Descendants of the French Nobility."
Using a novel dataset, this paper shows that descendants of former French nobility are significantly more likely to score higher on entrance exams to top French universities. Because nobility has been abolished in France in 1870, this result is not due to these individuals benefiting from a higher status. Top French universities are highly selective (less than 3% acceptance rate). The majority of French presidents, top French researchers and CEOs are alumni of these universities. The average wage of graduates of top universities are significantly higher than the average wages of graduates of other universities. This result implies that one reason for the prevalence of inequality is the transmission of human capital. Because most nobility titles were established in the 16th century, human capital transmission is highly persistent.