Elasticity of Taxable Income: Evidence from Changes in Municipal Income Tax Rates in Finland

2018 ◽  
Vol 120 (3) ◽  
pp. 943-973 ◽  
Author(s):  
Tuomas Matikka
Keyword(s):  
Income Tax ◽  
Tax Rates ◽  
Taxable Income ◽  
Elasticity Of Taxable Income

Tax Administration versus Tax Rates: Evidence from Corporate Taxation in Indonesia

2021 ◽  
Vol 111 (12) ◽  
pp. 3827-3871
Author(s):  
M. Chatib Basri ◽  
Mayara Felix ◽  
Rema Hanna ◽  
Benjamin A. Olken
Keyword(s):  
Developing Countries ◽  
Income Tax ◽  
Corporate Taxation ◽  
Corporate Income Tax ◽  
Tax Revenue ◽  
Tax Administration ◽  
Tax Rates ◽  
Taxable Income ◽  
Elasticity Of Taxable Income ◽  
Percentage Points

We compare two approaches to increasing tax revenue: tax administration and tax rates. We show that when Indonesia moved top regional firms into “medium taxpayer offices,” with high staff-to-taxpayer ratios, tax revenue more than doubled. Examining nonlinear changes to corporate income tax rates, we estimate an elasticity of taxable income of 0.579. Combining these estimates, improved tax administration is equivalent to raising top rates on all firms by 8 percentage points. On net, improved tax administration can have significant returns for developing countries. (JEL H25, H26, K34, O17)

5. Income tax

2017 ◽  
Author(s):  
Kathryn Wright ◽  
Clare Firth ◽  
Lucy Crompton ◽  
Helen Fox ◽  
Frances Seabridge ◽  
...  
Keyword(s):  
Income Tax ◽  
Charitable Giving ◽  
Professional Training ◽  
Tax Law ◽  
Tax Rates ◽  
Taxable Income ◽  
Income Tax Law

Income tax is an essential part of a lawyer’s knowledge and professional training. Whilst it is not necessary to have knowledge to the extent that a specialist tax lawyer would have, it is necessary to have knowledge and understanding sufficient to recognise its implications as they arise and affect the client and ourselves. This chapter discusses sources of income tax law; collection and payment of income tax; rates of income tax and allowances; calculation of income tax; sources of taxable income; and charitable giving. This chapter covers all the changes introduced by the 2015 Budget.

Measuring Revenue-maximizing Elasticities of Taxable Income

2016 ◽  
Vol 45 (2) ◽  
pp. 174-204 ◽  
Author(s):  
John Creedy ◽  
Norman Gemmell
Keyword(s):  
Income Tax ◽  
Tax Rates ◽  
Marginal Rate ◽  
Tax System ◽  
Tax Rate ◽  
Taxable Income ◽  
Wide Range ◽  
The Us ◽  
Marginal Tax Rates ◽  
The Right

This article considers the question of whether marginal tax rates (MTRs) in the US income tax system are on the “right” side of their respective Laffer curves. Previous attention has tended to focus specifically on the top MTR. Conceptual expressions for these “revenue-maximizing elasticities of taxable income” (ETI L), based on readily observable tax parameters, are presented for each tax rate in a multi-rate income tax system. Applying these to the US income tax, with its complex effective marginal rate structure, demonstrates that a wide range of revenue-maximizing ETI values can be expected within, and across, tax brackets and for all taxpayers in aggregate. For some significant groups of taxpayers, these revenue-maximizing ETIs appear to be within the range of empirically estimated elasticities.

scholarly journals The Elasticity of Taxable Income with Respect to Marginal Tax Rates: A Critical Review

2012 ◽  
Vol 50 (1) ◽  
pp. 3-50 ◽  
Author(s):  
Emmanuel Saez ◽  
Joel Slemrod ◽  
Seth H Giertz
Keyword(s):  
The United States ◽  
Critical Discussion ◽  
Future Research ◽  
Tax Rates ◽  
Empirical Estimation ◽  
Sufficient Statistic ◽  
Tax Rate ◽  
Taxable Income ◽  
Elasticity Of Taxable Income ◽  
Marginal Tax Rates

This paper critically surveys the large and growing literature estimating the elasticity of taxable income with respect to marginal tax rates using tax return data. First, we provide a theoretical framework showing under what assumptions this elasticity can be used as a sufficient statistic for efficiency and optimal tax analysis. We discuss what other parameters should be estimated when the elasticity is not a sufficient statistic. Second, we discuss conceptually the key issues that arise in the empirical estimation of the elasticity of taxable income using the example of the 1993 top individual income tax rate increase in the United States to illustrate those issues. Third, we provide a critical discussion of selected empirical analyses of the elasticity of taxable income in light of the theoretical and empirical framework we laid out. Finally, we discuss avenues for future research. (JEL H24, H31, J22)

scholarly journals ELASTISITAS PENDAPATAN WAJIB PAJAK (ELASTICITY OF TAXABLE INCOME) DI INDONESIA

KEBERLANJUTAN ◽  
2019 ◽  
Vol 4 (2) ◽  
pp. 1192
Author(s):  
Arif Nugrahanto
Keyword(s):  
Labor Supply ◽  
Income Elasticity ◽  
Secular Trend ◽  
Working Hours ◽  
Tax Rates ◽  
Net Income ◽  
Transfer Policy ◽  
Taxable Income ◽  
Elasticity Of Taxable Income ◽  
Short Run

AbstractThe responses of taxpayers due to the changes in tax rates have attracted the curiosity of many economists. The magnitude of taxpayers’ responses is substantially considered to be very importance in the formulation of tax and transfer policy (Giertz, 2009). The fundamental analysis on how to see the respond of taxpayers due to any changes in tax rates uses elasticity of labor supply, which estimates the changes of working hours with respect to the changes in tax rates. Because people’s response to a tax change may take several forms, including a labor supply response, elasticity of labor supply must be read carefully, as pertaining only to specific circumstances. Then, the elasticity of taxable income, which was originated by Lindsey (1986), is used and introduced to overcome such restrictions.Using very rich panel data of Indonesian taxpayers from 2007 to 2010, this study generates numerous findings about the elasticity of taxable income. The extent of taxpayers’ response deeply depends on how the secular trend of income is isolated and controlled. Without income control, the elasticity of taxable income is 0.289, while using a 10-spline of log of income, the extent is 0.368. Moreover, the study also uses net income as complement of the core estimation. This study identifies that the elasticity of taxable income in Indonesia is in the range of 0.302-0.368 depending on the income definition applied. The findings confirm with most literature on this subject and closely near to what was specified by Saez, et. al (2010) as “a consensus value.” But it should be underlined that these magnitudes are just in the short run period. This also found that the short run and medium period produce varying magnitudes. The medium run period calculation generates the number of close to zero. It might be due to the existence of income shifting, as stated by Goolsbee (2000). Another argument is myopic phenomenon. As taxpayers only focus on the situation that just happen surroundings them.The difference in the effect highpoints what Slemrod (2001) said that the magnitude of reported income elasticity is not an unchanged parameter; indeed, it is subject to government policy. Moreover, the surroundings of the tax reform and after all may also have influences.  

5. Income tax

2018 ◽  
Author(s):  
Kathryn Wright ◽  
Clare Firth ◽  
Lucy Crompton ◽  
Helen Fox ◽  
Frances Seabridge ◽  
...  
Keyword(s):  
Income Tax ◽  
Charitable Giving ◽  
Professional Training ◽  
Tax Law ◽  
Tax Rates ◽  
Taxable Income ◽  
Income Tax Law

Income tax is an essential part of a lawyer’s knowledge and professional training. Whilst it is not necessary to have knowledge to the extent that a specialist tax lawyer would have, it is necessary to have knowledge and understanding sufficient to recognise its implications as they arise and affect the client and ourselves. This chapter discusses sources of income tax law; collection and payment of income tax; rates of income tax and allowances; calculation of income tax; sources of taxable income; and charitable giving. This chapter covers the changes introduced by the Autumn 2017 Budget.

scholarly journals The elasticity of taxable income in Spain: 1999–2014

SERIEs ◽  
2019 ◽  
Vol 10 (3-4) ◽  
pp. 281-320 ◽  
Author(s):  
Miguel Almunia ◽  
David Lopez-Rodriguez
Keyword(s):  
Estimation Methods ◽  
Tax Rates ◽  
Personal Income Tax ◽  
Capital Income ◽  
Tax Rate ◽  
Taxable Income ◽  
Elasticity Of Taxable Income ◽  
Marginal Tax Rates ◽  
Tax Deductions ◽  
The One

Abstract We study how taxable income responds to changes in marginal tax rates, using as a main source of identifying variation three large reforms to the Spanish personal income tax implemented in the period 1999–2014. The most reliable estimates of the elasticity of taxable income (ETI) with respect to the net-of-tax rate for this period are between 0.45 and 0.64. The ETI is about three times larger for self-employed taxpayers than for employees and larger for business income than for labor and capital income. The elasticity of broad income is smaller, between 0.10 and 0.24, while the elasticity of some tax deductions such as the one for private pension contributions exceeds one. Our estimates are similar across a variety of estimation methods and sample restrictions and also robust to potential biases created by mean reversion and heterogeneous income trends.

scholarly journals The Incentive Effects of Marginal Tax Rates: Evidence from the Interwar Era

2014 ◽  
Vol 6 (3) ◽  
pp. 242-281 ◽  
Author(s):  
Christina D. Romer ◽  
David H. Romer
Keyword(s):  
Time Series ◽  
Income Tax ◽  
Positive Impact ◽  
Tax Rates ◽  
Marginal Rate ◽  
Taxable Income ◽  
Incentive Effects ◽  
Marginal Tax Rates ◽  
The Impact ◽  
Section Analysis

This paper uses the interwar United States as a laboratory for investigating the incentive effects of marginal income tax rates. We examine the impact of the large changes in rates in this period on taxable income using time-series/cross-section analysis of data by small slices of the income distribution. We find that the effect operated in the expected direction but was economically small, and that it is precisely estimated and highly robust. We also find suggestive time-series evidence of a positive impact of marginal rate cuts on business formation, but no evidence of an important effect on other indicators of investment. (JEL D31, H24, H31, M13, N42)

scholarly journals Digging into the Channels of Bunching: Evidence from the Uruguayan Income Tax

2021 ◽  
Author(s):  
Marcelo Bergolo ◽  
Gabriel Burdin ◽  
Mauricio De Rosa ◽  
Matias Giaccobasso ◽  
Martin Leites
Keyword(s):  
Income Tax ◽  
Personal Income ◽  
Income Taxation ◽  
Tax Base ◽  
Taxable Income ◽  
Labour Income ◽  
Elasticity Of Taxable Income ◽  
Personal Income Taxation

Abstract Based on detailed administrative tax records, we implement a bunching design to explore how individual taxpayers respond to personal income taxation in Uruguay. We estimate a very modest elasticity of taxable income at the first kink point (0.06) driven by a combination of gross labour income and deductions responses. Taxpayers use personal deductions more intensively close to the kink point and underreport income to the tax authority. Our results suggest that the efficiency costs of taxation are not necessarily large in contexts characterised by limited deduction opportunities. Policy efforts should be directed at broadening the tax base and improving enforcement capacity.

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