Real Estate & Planning Research Seminar by Dr. Jakob Brounstein, Institute for Fiscal Studies Title: Taxing Business Ownership via Tax Havens: Evidence from Ecuador

Abstract:

How can ownership registries be leveraged to raise transparency and curb tax haven usage? We address this question by analyzing Ecuador's income tax surcharge on firms whose owners are tax havens residents and compare the behavior of baseline haven-owned firms to other foreign-owned firms. The reform induced 12 percent of haven-owned firms to report terminal owners outside havens, with new owners predominantly identified as individuals rather than firms, thereby enhancing beneficial ownership transparency. Exposed firms increase tax payments in Ecuador by 17%, with no discernible effect on payrolls and investment. These findings suggest that pairing a “flashlight” (ownership registry) with a “stick” (tax surcharge) can improve transparency and reduce tax erosion at a limited efficiency cost.

Bio: Jakob Brounstein is a Postdoctoral Scholar at the Institute for Fiscal Studies working on issues in public and labor economics. His research largely pertains to tax compliance and tax administrative issues in both developed and developing country settings. Some of his select topics-of-interest include non-compliance penalty rates, tax preparers, and tax haven usage. He received his PhD in Economics from UC Berkeley.