The latest NBER Digest summarizes work by Henrik Kleven, Camille Landais, and Emmanuel Saez documenting how football [soccer] players respond to tax incentives.
[I]n studying teams’ performances from 1980 through 2009, they find that low-tax nations had better teams after Bosman. “This suggests that low-tax countries experienced an improvement of club performances by being better able to attract good foreign players and keep good domestic players at home,” they write.
Their study also looks at the impact of tax reforms in specific countries. For example, in 2004 Spain introduced the so-called “Beckham Law” (named after British superstar David Beckham, who was one of the first footballers to take advantage of it). It allowed nonresidents to be taxed at a flat rate of 24 percent instead of the progressive rate for residents, whose top marginal rate by 2008 stood at 43 percent. After the law, Spain saw its share of foreign players increase while nearby Italy, which had a similar top league, saw its share of foreign talent shrink.