Francesca Subioli (University of Roma Tre)
Giovanni Gallo and Luca Giangregorio
This paper examines the distributional effects of tax incentives aimed at attracting high-skilled foreigners and returning expatriates to Italy. While a large literature shows that high-skilled migration is responsive to taxation, much less is known about how preferential tax schemes affect income inequality, tax progressivity, and horizontal equity. We address this gap by evaluating the Italian preferential tax regime over the period 2016–2022. Using EU-SILC microdata, administrative tabulations from the Italian Ministry of Economy and Finance, and official migration statistics, we build a static tax-benefit microsimulation framework to estimate counterfactual income distributions in the absence of the policy. We assess the impact of the scheme on a broad set of pre- and post-tax inequality measures, including the Gini coefficient, Generalized Entropy indices, top income shares, and percentile ratios. Our analysis provides new evidence on the trade-off between efficiency and equity in tax policies designed to attract mobile talent.