Recent Literature on Taxable-Income Elasticities
This paper reviews the literature on taxable-income elasticities, focusing primarily on empirical studies examining the U.S. tax changes of 1981, 1986, 1990, and 1993 and the bracket creep of the late 1970s and early 1980s. The paper first provides background on the importance of the elasticity of taxable income both for forecasting income tax revenue and for assessing the efficiency implications of tax rate changes. It then discusses the major methodological issues and obstacles before delving into the literature. The paper emphasizes the different methodologies employed and the sensitivity of estimates to an array of factors, including sample selection, the tax reform under examination, and econometric techniques (or model specification). Although it recognizes advances in the literature in recent years, the paper concludes that responses to tax rate changes are far from fully understood and that there is much to be gained from continued research on this topic.
|Date of creation:||Dec 2004|
|Date of revision:|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- James E. Long, 1999. "The Impact of Marginal Tax Rates on Taxable Income: Evidence from State Income Tax Differentials," Southern Economic Journal, Southern Economic Association, vol. 65(4), pages 855-869, April.
- 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.
- Jon Gruber & Emmanuel Saez, 2000. "The Elasticity of Taxable Income: Evidence and Implications," NBER Working Papers 7512, National Bureau of Economic Research, Inc.
- Slemrod, Joel & Yitzhaki, Shlomo, 2002.
"Tax avoidance, evasion, and administration,"
Handbook of Public Economics,
in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 22, pages 1423-1470
- Slemrod, Joel, 1998. "Methodological Issues in Measuring and Interpreting Taxable Income Elasticities," National Tax Journal, National Tax Association, vol. 51(n. 4), pages 773-88, December.
- Daniel Feenberg & James Poterba, 1992.
"Income Inequality and the Incomes of Very High Income Taxpayers: Evidence from Tax Returns,"
NBER Working Papers
4229, National Bureau of Economic Research, Inc.
- Daniel R. Feenberg & James M. Poterba, 1993. "Income Inequality and the Incomes of Very High-Income Taxpayers: Evidence from Tax Returns," NBER Chapters, in: Tax Policy and the Economy, Volume 7, pages 145-177 National Bureau of Economic Research, Inc.
- Feenberg, D.R. & Poterba, J.M., 1992. "Income Inequality and the Incomes of Very High Income Taxpayers: Evidence from Tax Returns," Working papers 92-16, Massachusetts Institute of Technology (MIT), Department of Economics.
- Austan Goolsbee, 1997.
"What Happens When You Tax the Rich? Evidence from Executive Compensation,"
NBER Working Papers
6333, National Bureau of Economic Research, Inc.
- 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.
- Robert A. Moffitt & Mark Wilhelm, 1998.
"Taxation and the Labor Supply: Decisions of the Affluent,"
NBER Working Papers
6621, National Bureau of Economic Research, Inc.
- Robert A Moffitt & Mark Wilhelm, 2000. "Taxation and the Labor Supply - Decisions of the Affluent," Economics Working Paper Archive 414, The Johns Hopkins University,Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:16159. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If references are entirely missing, you can add them using this form.