The Elasticity of Taxable Income over the 1980s and 1990s

Giertz, Seth (2007): The Elasticity of Taxable Income over the 1980s and 1990s. Published in: National Tax Journal , Vol. 60, No. 4 : pp. 743-768.

Abstract

Taxable (and broad) income elasticities are estimated using tax return data from 1979 to 2001. Data from the Continuous Work History Survey (CWHS) yield an estimated taxable income elasticity for the 1990s that is about half the corresponding 1980s estimate. Estimates from the full Statistics of Income, which heavily oversamples high–income filers, generally confirm the CWHS results. More sophisticated income control brings the estimates for the two decades closer together—to 0.40 for the 1980s and 0.26 for the 1990s. Work by Kopczuk (2005) implies that the narrowing of the tax base since 1986 could account for 14 to 29 percent of the remaining difference.

• Item Type: MPRA Paper
• Language: English
• Keywords: Taxable Income Elasticity; Behavioral Responses to taxation; Efficiency
• Subjects: H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H21 - Efficiency ; Optimal Taxation; H - Public Economics > H2 - Taxation, Subsidies, and Revenue; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor

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