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Did Tax Flattening Affect RRSP Contributions?

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  • Michael R. Veall

Abstract

In 1988, marginal personal income tax rates changed in Canada, for some individuals by reasonably substantial amounts. This note examines a large sample of tax-filer data and finds little convincing evidence of any effect on contributions to Registered Retirement Saving Plans (RRSPs).

Suggested Citation

  • Michael R. Veall, 1999. "Did Tax Flattening Affect RRSP Contributions?," Quantitative Studies in Economics and Population Research Reports 342, McMaster University.
  • Handle: RePEc:mcm:qseprr:342
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    File URL: http://socserv.mcmaster.ca/qsep/p/qsep342.PDF
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    References listed on IDEAS

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    1. James M. Poterba & Steven F. Venti & David A. Wise, 1996. "How Retirement Saving Programs Increase Saving," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 91-112, Fall.
    2. Thaler, Richard H, 1990. "Saving, Fungibility, and Mental Accounts," Journal of Economic Perspectives, American Economic Association, vol. 4(1), pages 193-205, Winter.
    3. John Burbidge & Deborah Fretz & Michael R. Veall, 1998. "Canadian and American Saving Rates and the Role of RRSPs," Canadian Public Policy, University of Toronto Press, vol. 24(2), pages 259-263, June.
    4. Eric M. Engen & William G. Gale & John Karl Scholz, 1996. "The Illusory Effects of Saving Incentives on Saving," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 113-138, Fall.
    5. John Burbidge & Deborah Fretz & Michael R. Veall, 1997. "The Effect of RRSPs on Savings in Canada," Independence and Economic Security of the Older Population Research Papers 14, McMaster University.
    6. French, Kenneth R & Poterba, James M, 1991. "Investor Diversification and International Equity Markets," American Economic Review, American Economic Association, vol. 81(2), pages 222-226, May.
    7. Thaler, Richard H, 1994. "Psychology and Savings Policies," American Economic Review, American Economic Association, vol. 84(2), pages 186-192, May.
    8. Carroll, Chris & Summers, Lawrence H., 1987. "Why have private savings rates in the United States and Canada diverged?," Journal of Monetary Economics, Elsevier, vol. 20(2), pages 249-279, September.
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    Cited by:

    1. Håkan Selin, 2012. "Marginal Tax Rates and Tax‐Favoured Pension Savings of the Self‐Employed: Evidence from Sweden," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(1), pages 79-100, March.
    2. Sillamaa, Mary-Anne & Veall, Michael R., 2001. "The effect of marginal tax rates on taxable income: a panel study of the 1988 tax flattening in Canada," Journal of Public Economics, Elsevier, vol. 80(3), pages 341-356, June.
    3. Engelhardt, Gary V. & Madrian, Brigitte C., 2004. "Employee Stock Purchase Plans," National Tax Journal, National Tax Association, vol. 57(2), pages 385-406, June.
    4. Michael R. Veall, 2006. "The Top Shares of Older Earners in Canada," Social and Economic Dimensions of an Aging Population Research Papers 156, McMaster University.
    5. Juan Ayuso & Juan F. Jimeno & Ernesto Villanueva, 2007. "The effects of the introduction of tax incentives on retirement savings," Working Papers 0724, Banco de España;Working Papers Homepage.
    6. Veall, Michael R., 2013. "Estimating the Number of Guaranteed Income Supplement Recipients Who Have Mistakenly Saved in Registered Retirement Savings Plans and Registered Pension Plans," CLSSRN working papers clsrn_admin-2013-26, Vancouver School of Economics, revised 29 Apr 2013.
    7. Alan, Sule & Atalay, Kadir & Crossley, Thomas F. & Jeon, Sung-Hee, 2010. "New evidence on taxes and portfolio choice," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 813-823, December.
    8. Milligan, Kevin, 2003. "How do contribution limits affect contributions to tax-preferred savings accounts?," Journal of Public Economics, Elsevier, vol. 87(2), pages 253-281, February.

    More about this item

    Keywords

    income tax rate; retirement saving plan;

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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