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Pension Saving Responses to Anticipated Tax Changes: Evidence from Monthly Pension Contribution Records

Author

Listed:
  • Claus Thustrup Kreiner
  • Søren Leth-Petersen
  • Peer Ebbesen Skov

    () (Department of Economics,Auckland University of Technology, NZ)

Abstract

A Danish tax reform, decided in May 2009 and taking effect from the beginning of 2010, lowered the marginal tax rate on top bracket taxable income from 63% to 56%. Because contributions to pension accounts are tax deductible, the reform provided an incentive to increase pension contributions before the change in taxation. Using high frequency panel data, we document an increase in pension contributions in the second half of 2009 in response to the anticipated change in taxation, and that this led to an increase in total savings. Length: 36 pages

Suggested Citation

  • Claus Thustrup Kreiner & Søren Leth-Petersen & Peer Ebbesen Skov, 2016. "Pension Saving Responses to Anticipated Tax Changes: Evidence from Monthly Pension Contribution Records," Working Papers 2016-06, Auckland University of Technology, Department of Economics.
  • Handle: RePEc:aut:wpaper:201606
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    File URL: http://www.aut.ac.nz/__data/assets/pdf_file/0010/695260/Economics-WP-2016-06.pdf
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    References listed on IDEAS

    as
    1. Raj Chetty & John N. Friedman & Søren Leth-Petersen & Torben Heien Nielsen & Tore Olsen, 2014. "Active vs. Passive Decisions and Crowd-Out in Retirement Savings Accounts: Evidence from Denmark," The Quarterly Journal of Economics, Oxford University Press, vol. 129(3), pages 1141-1219.
    2. 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, vol. 8(3), pages 233-257, August.
    3. Bernheim, B. Douglas, 2002. "Taxation and saving," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.),Handbook of Public Economics, edition 1, volume 3, chapter 18, pages 1173-1249, Elsevier.
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    Cited by:

    1. Katrine Marie Jakobsen & Jakob Egholt Søgaard, 2020. "Identifying Behavioral Responses to Tax Reforms: New Insights and a New Approach," CEBI working paper series 20-23, University of Copenhagen. Department of Economics. The Center for Economic Behavior and Inequality (CEBI).

    More about this item

    Keywords

    Pension savings; tax incentives; high frequency individual data.;

    JEL classification:

    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents

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