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Estimating the Elasticity of Taxable Income: Evidence from Top Japanese Taxpayers

Author

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  • Miyazaki, Takeshi
  • Ishida, Ryo

Abstract

This study measures the elasticity of taxable income (ETI) using data on top Japanese taxpayers between 1986 and 1989. During these years, Japan decreased the income tax rates of the top-to-bottom income earners and number of income brackets drastically. We construct a panel dataset of top taxpayers in Japan in this period, using Japanese tax return data and estimate the ETI. We find that the ETI with regard to the net-of-tax rate is approximately 0.074–0.055, considerably lower than those for the United States and most European countries but nearly equal to that for Denmark.

Suggested Citation

  • Miyazaki, Takeshi & Ishida, Ryo, 2016. "Estimating the Elasticity of Taxable Income: Evidence from Top Japanese Taxpayers," MPRA Paper 74623, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:74623
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    File URL: https://mpra.ub.uni-muenchen.de/74623/1/MPRA_paper_74623.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Elasticity of taxable income; income tax; Japan; top taxpayers;

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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