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The Effect of Taxes on Taxable Earnings: Evidence From the 2001 and Related U.S. Federal Tax Acts

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  • Singleton, Perry

Abstract

This study measures the elasticity of taxable earnings to the marginal tax price, identified by a marriage penalty relief provision contained in the Economic Growth and Tax Relief Reconciliation Act of 2001. The change in joint taxable earnings in response to the provision implies a joint elasticity ranging from 0.217 to 0.304. The joint response is driven by the taxable wage earnings of males, and does not reflect a shift in income from tax-deferred to taxable compensation, but an increase in total wage earnings.

Suggested Citation

  • Singleton, Perry, 2011. "The Effect of Taxes on Taxable Earnings: Evidence From the 2001 and Related U.S. Federal Tax Acts," National Tax Journal, National Tax Association;National Tax Journal, vol. 64(2), pages 323-351, June.
  • Handle: RePEc:ntj:journl:v:64:y:2011:i:2:p:323-51
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Abby Alpert & David Powell, 2012. "Tax Elasticity of Labor Earnings for Older Individuals," Working Papers wp272, University of Michigan, Michigan Retirement Research Center.
    2. repec:kap:itaxpf:v:24:y:2017:i:6:d:10.1007_s10797-017-9470-3 is not listed on IDEAS
    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. José Félix Sanz-Sanz & María Arrazola-Vacas & Nuria Rueda-López & Desiderio Romero-Jordán, 2015. "Reported gross income and marginal tax rates: estimation of the behavioural reactions of Spanish taxpayers," Applied Economics, Taylor & Francis Journals, vol. 47(5), pages 466-484, January.
    5. Melanie Guldi & Lucie Schmidt, 2017. "Taxes, Transfers, and Women’s Labor Supply in the United States," Working Papers 2017-01, University of Central Florida, Department of Economics.
    6. Stevenson, Adam, 2012. "The Labor Supply and Tax Revenue Consequences of Federal Same-Sex Marriage Legalization," National Tax Journal, National Tax Association, vol. 65(4), pages 783-806, December.
    7. repec:ntj:journl:v:70:y:2017:i:2:p:367-392 is not listed on IDEAS
    8. Alpert, Abby & Powell, David, 2014. "Estimating Intensive and Extensive Tax Responsiveness: Do Older Workers Respond to Income Taxes?," Working Papers 987-1, RAND Corporation.
    9. Thoresen, Thor O. & Vattø, Trine E., 2015. "Validation of the discrete choice labor supply model by methods of the new tax responsiveness literature," Labour Economics, Elsevier, vol. 37(C), pages 38-53.
    10. Miyazaki, Takeshi & Ishida, Ryo, 2016. "Estimating the Elasticity of Taxable Income: Evidence from Top Japanese Taxpayers," MPRA Paper 74623, University Library of Munich, Germany.
    11. 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.
    12. Weber, Caroline E., 2014. "Toward obtaining a consistent estimate of the elasticity of taxable income using difference-in-differences," Journal of Public Economics, Elsevier, vol. 117(C), pages 90-103.

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