Tax-bunching, Income Switching and Self-employment

Forskningsenhed: EPRU


Abstract:
Since Feldstein (1995, 1999) the behavioral response of taxable income to changes in marginal tax rates has been seen the central parameter in the formulation of tax and transfer policies. A large empirical literature has therefore focused on estimating the taxable income elasticity and many di¤erent methods have been suggested (see Saez et al. (2010) for a critical review). In a recent contribution to this literature, Saez (2010) shows that the compensated elasticity of reported taxable income can be estimated directly from the amount of bunching around the tax cutoffs.

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You can read the Journal article Tax bunching, income shifting and self-employment, Journal of Public Economics 107 (2013) 1–18, Daniel le Maire & Bertel Schjerning here

and you can read the Working paper Tax Bunching, Income Shifting and Self-empoyment, Bertel Schjerning & Daniel le Maire here