Sebastien J Bradley

Cross-Country Evidence on the Preliminary Effects of Patent Box Regimes on Patent Activity and Ownership

This paper evaluates the initial impacts of patent box regimes in light of their primary stated objectives: stimulating domestic innovation and retaining mobile patent income to limit base erosion. Despite their lack of nexus requirements, we find that patent box regimes yield a 3 percent increase in new patent applications for every percentage point reduction in the tax rate on patent income. We find no significant impact of these regimes on deterring outward cross-border attribution of patent ownership, or on attracting ownership of foreign inventions. Increased patenting activity hence appears focused on inventions involving co-located (domestic) patent owners and inventors.

Inattention to Deferred Increases in Tax Bases: How Michigan Home Buyers Are Paying for Assessment Limits

Michigan’s implementation of assessment limits gives rise to a wide variation in taxable basis across comparable homes. Exploiting the fact that the resulting differences in property tax liability are temporarily inherited by new homebuyers, I estimate the degree of capitalization of these largely idiosyncratic tax differences to evaluate whether homebuyers understand the tax implications of their home purchases. Consistent with anecdotal evidence but in stark contrast to the traditional view of rational consumer behavior, I find that homebuyers are woefully inattentive to the temporary nature of their initial tax obligations, resulting in an overpayment of nearly

Hidden Baggage: Behavioral Responses to Changes in Airline Ticket Tax Disclosure

10,000 for the average home.

Property Tax Salience and Payment Delinquency

We examine the impact on air travelers of an enforcement action issued by the U.S. Department of Transportation (DOT) in 2012 requiring that domestic air carriers and online travel agents incorporate all mandatory taxes and fees in their advertised fares. Consistent with the literature on tax salience, we find quasi-experimental evidence that the more prominent display of tax-inclusive prices is associated with a reduction in tax incidence on consumers, and this effect varies non-monotonically with market concentration. Ticket revenues are commensurately reduced, while passenger demand and average per-passenger tax revenue between origin and destination airport-pairs likewise decline following the introduction of full-fare advertising.