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Recent Evidence on Taxpayers' Response to the Rate Increases in the 1990s

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  • Sammartino, Frank
  • Weiner, David

Abstract

Tabulates cross-sectional and panel data on changes in reported incomes for the period 1989-1995. Shows that reported income for high-income taxpayers (especially wages and salaries) fell from 1992 to 1993 following the 1993 tax increase. By 1995, however, the decline for the highest income group was recouped. Suggests that across time comparisons, like those made here and previously for TRA 86, will not yield a stable relationship between marginal rates and reported incomes.

Suggested Citation

  • Sammartino, Frank & Weiner, David, 1997. "Recent Evidence on Taxpayers' Response to the Rate Increases in the 1990s," National Tax Journal, National Tax Association, vol. 50(3), pages 683-705, September.
  • Handle: RePEc:ntj:journl:v:50:y:1997:i:3:p:683-705
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    References listed on IDEAS

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    1. Feldstein, Martin, 1995. "Effect of Marginal Tax Rates on Taxable Income: A Panel Study of the 1986 Tax Reform Act," Scholarly Articles 2766676, Harvard University Department of Economics.
    2. 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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    Cited by:

    1. Claus Thustrup Kreiner & Søren Leth-Petersen & Peer Ebbesen Skov, 2016. "Tax Reforms and Intertemporal Shifting of Wage Income: Evidence from Danish Monthly Payroll Records," American Economic Journal: Economic Policy, American Economic Association, pages 233-257.
    2. Austan Goolsbee, 2000. "What Happens When You Tax the Rich? Evidence from Executive Compensation," Journal of Political Economy, University of Chicago Press, vol. 108(2), pages 352-378, April.
    3. Neisser, Carina, 2017. "The elasticity of taxable income: A meta-regression analysis," ZEW Discussion Papers 17-032, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    4. Gruber, Jon & Saez, Emmanuel, 2002. "The elasticity of taxable income: evidence and implications," Journal of Public Economics, Elsevier, pages 1-32.
    5. Karel Mertens & José L. Montiel Olea, 2013. "Marginal Tax Rates and Income: New Time Series Evidence," NBER Working Papers 19171, National Bureau of Economic Research, Inc.
    6. Austan Goolsbee, 1999. "Evidence on the High-Income Laffer Curve from Six Decades of Tax Reform," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, pages 1-64.
    7. repec:ntj:journl:v:70:y:2017:i:2:p:367-392 is not listed on IDEAS
    8. Federico A. Bugni & Ivan A. Canay & Xiaoxia Shi, 2014. "Inference for functions of partially identified parameters in moment inequality models," CeMMAP working papers CWP05/14, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    9. James Browne & David Phillips, 2017. "Estimating the size and nature of responses to changes in income tax rates on top incomes in the UK: a panel analysis," IFS Working Papers W17/13, Institute for Fiscal Studies.
    10. Blomquist, Sören & Kumar, Anil & Liang, Che-Yuan & Newey, Whitney K., 2014. "Individual Heterogeneity, Nonlinear Budget Sets, and Taxable Income," Working Paper Series, Center for Fiscal Studies 2014:1, Uppsala University, Department of Economics.
    11. Emmanuel Saez, 2004. "Reported Incomes and Marginal Tax Rates, 1960-2000: Evidence and Policy Implications," NBER Chapters,in: Tax Policy and the Economy, Volume 18, pages 117-174 National Bureau of Economic Research, Inc.
    12. Seth H. Giertz, 2008. "Panel Data Techniques and the Elasticity of Taxable Income: Working Paper 2008-11," Working Papers 20407, Congressional Budget Office.
    13. Raj Chetty & John N. Friedman & Tore Olsen & Luigi Pistaferri, 2011. "Adjustment Costs, Firm Responses, and Micro vs. Macro Labor Supply Elasticities: Evidence from Danish Tax Records," The Quarterly Journal of Economics, Oxford University Press, vol. 126(2), pages 749-804.
    14. 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, pages 3-50.
    15. Holmlund Bertil & Söderström Martin, 2011. "Estimating Dynamic Income Responses to Tax Reform," The B.E. Journal of Economic Analysis & Policy, De Gruyter, pages 1-38.
    16. Seth H. Giertz, 2006. "The Elasticity of Taxable Income During the 1990s: A Sensitivity Analysis: Working Paper 2006-03," Working Papers 17611, Congressional Budget Office.
    17. Saez, Emmanuel, 2003. "The effect of marginal tax rates on income: a panel study of 'bracket creep'," Journal of Public Economics, Elsevier, pages 1231-1258.
    18. Eleni A. Kaditi & Elisavet I. Nitsi, 2013. "Recent Evidence on the Taxpayers’ Reporting Decision in Greece: A Quantile Regression Approach," European Research Studies Journal, European Research Studies Journal, pages 3-24.
    19. Holmlund, Bertil & Söderström, Martin, 2008. "Estimating dynamic income responses to tax reforms: Swedish evidence," Working Paper Series 2008:28, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    20. 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, pages 3-50.
    21. Saez, Emmanuel, 2003. "The effect of marginal tax rates on income: a panel study of 'bracket creep'," Journal of Public Economics, Elsevier, pages 1231-1258.

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