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Adóköteles jövedelmek rugalmassága – egy identifikációs kísérlet a családi adókedvezmény 2011-es bevezetése alapján
[Elasticity of Taxable Income: An Experiment for Identification Based on the Introduction of the Hungarian Family Allowance in 2011]

Author

Listed:
  • Varga, Gergely

    (Corvinus University Budapest
    Ministry of National Economy)

  • Nobilis, Benedek

    (Department of Tax Policy and International Taxation, Ministry of Finance)

  • Svraka, András

    (Tax Policy and Research Unit, Ministry of Finance)

Abstract

The elasticity of taxable income has primary importance both from a theoretical and from a policy perspective. In this paper we estimate how the declared taxable income of taxpayers eligible for the family allowance changed following the introduction of the allowance in 2011. Our results show that the taxable income was more responsive to tax changes compared to previous Hungarian studies: the uncompensated elasticity falls robustly in the 0.15–0.25 range. Decomposing it to substitution and income effect is rather uncertain, which in our view is due to the strong correlation between changes in the marginal and average tax prices.

Suggested Citation

  • Varga, Gergely & Nobilis, Benedek & Svraka, András, 2018. "Adóköteles jövedelmek rugalmassága – egy identifikációs kísérlet a családi adókedvezmény 2011-es bevezetése alapján [Elasticity of Taxable Income: An Experiment for Identification Based on the Intr," Taxation Working Papers 3, Ministry of Finance, Department of Tax Policy and International Taxation.
    • Handle: RePEc:auo:moftwp:3
    as

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    References listed on IDEAS

    as
    1. Emmanuel Saez & Joel Slemrod & Seth H. Giertz, 2012. "The Elasticity of Taxable Income with Respect to Marginal Tax Rates: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 50(1), pages 3-50, March.
    2. Gruber, Jon & Saez, Emmanuel, 2002. "The elasticity of taxable income: evidence and implications," Journal of Public Economics, Elsevier, vol. 84(1), pages 1-32, April.
    3. Giertz, Seth, 2004. "Recent Literature on Taxable-Income Elasticities," MPRA Paper 16159, University Library of Munich, Germany.
    4. Áron Kiss & Pálma Mosberger, 2015. "The elasticity of taxable income of high earners: evidence from Hungary," Empirical Economics, Springer, vol. 48(2), pages 883-908, March.
    5. Benczúr, Péter & Benedek, Dóra & Bakos, Péter, 2008. "Az adóköteles jövedelem rugalmassága. Becslés és egy egykulcsos adórendszerre vonatkozó számítás a 2005. évi magyar adóváltozások alapján [The elasticity of taxable income: estimates and flat-tax p," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(9), pages 733-762.
    6. Seth H. Giertz, 2004. "Recent Literature on Taxable-Income Elasticities: Technical Paper 2004-16," Working Papers 16189, Congressional Budget Office.
    7. Feldstein, Martin, 1995. "The Effect of Marginal Tax Rates on Taxable Income: A Panel Study of the 1986 Tax Reform Act," Journal of Political Economy, University of Chicago Press, vol. 103(3), pages 551-572, June.
    8. Péter Benczúr & Gábor Kátay & Áron Kiss, 2012. "Assessing changes of the Hungarian tax and transfer system: A general-equilibrium microsimulation approach," MNB Working Papers 2012/7, Magyar Nemzeti Bank (Central Bank of Hungary).
    9. Feldstein, Martin, 1995. "The Effect of Marginal Tax Rates on Taxable Income: A Panel Study of the 1986 Tax Reform Act," Journal of Political Economy, University of Chicago Press, vol. 103(3), pages 551-572, June.
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    More about this item

    Keywords

    elasticity of taxable income; family allownace;

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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