Taxation and the Labor Supply:  Decisions of the Affluent

Moffitt, Robert A.; Wilhelm, Mark

doi:10.3386/w6621

Cited by 87 publications

(109 citation statements)

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“…While most specifications give negative elasticities, specifications that include instruments for the reversion-to-the-mean effects 2 yield non-negative tax elasticity estimates, the highest at 0.14. Still, this estimate is much lower than estimates on U.S. data, and suggests that skilled) and middle/low income earners (low-skilled) (Moffitt and Wilhelm 1998). So far, however, there seems to be little consensus regarding which explanation that fits the findings best (Samartino and Weiner 1997).…”

Section: Qwurgxfwlrqcontrasting

confidence: 46%

“…So far, however, there seems to be little consensus regarding which explanation that fits the findings best (Samartino and Weiner 1997). 2 The diff-of-diff approach almost inevitably implies a reversion-to-the-mean problem, as some individuals experience temporarily swings in income over time (Moffitt and Wilhelm 1998). progressive taxation is less harmful in Norway. 3 The 2SLS specifications and the "synthetic-tax-rate" approach give very similar results.…”

Section: Qwurgxfwlrqmentioning

confidence: 99%

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Income Responses to Tax Changes—Evidence from the Norwegian Tax Reform

Thoresen¹,

Aarbu²

2001

National Tax Journal

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'LVFXVVLRQ 3DSHUV 1R 6HSWHPEHU 6WDWLVWLFV 1RUZD\ 5HVHDUFK 'HSDUWPHQW 7KRU 2 7KRUHVHQ DQG .DUO 2YH $DUEX,QFRPH 5HVSRQVHV WR 7D[ &KDQJHV ± (YLGHQFH IURP WKH 1RUZHJLDQ 7D[ 5HIRUP $EVWUDFW Several studies, conducted on U.S. data, have found rather strong income responses to changes in marginal tax rates, when treating tax reforms as "natural experiments" and applying the differencesof-differences estimator on individual income data. The Norwegian tax reform of 1992 implied substantial increases in the net-of-tax rate (1 minus the change in the marginal tax rate) for highincome earners, and this paper provides measures of the elasticity of taxable income with respect to these tax rate changes. The natural experiment assumption of the differences-of-differences approach is discussed. Since the tax reform implied other tax changes and both demographic variables and shifting macroeconomic conditions might impact on income growth, we include other explanatory variables in addition to the net-of-tax rate changes. When including other explanatory variables, tax elasticity estimates are affected, but only modestly. Our estimates of the elasticity of taxable income due to changes in the marginal net-of-tax rate range from about -0

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Section: Qwurgxfwlrqcontrasting

confidence: 46%

Section: Qwurgxfwlrqmentioning

confidence: 99%

Income Responses to Tax Changes—Evidence from the Norwegian Tax Reform

Thoresen¹,

Aarbu²

2001

National Tax Journal

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“…Most studies from the 1980s produced labor supply elasticities that would reject this hypothesis for prime-aged working men (see, e.g., MaCurdy, 1992). More recent studies that focus on taxable income find more support, especially for men with high incomes (see, e.g., Goolsbee, 1999;and Mofitt and Wilhelm, 2000). For female labor supply, there is much less consensus.…”

Section: Introductionmentioning

confidence: 99%

“…Several recent studies combine natural experiments and instrumental variables (e.g., Auten and Caroll, 1999;and Gruber and Saez, 2002). However, Mofitt and Wilhelm (2000) point out that it seems unlikely that the simultaneity issue is completely solved in those studies.…”

Section: Introductionmentioning

confidence: 99%

Nonparametric structural estimation of labor supply in the presence of censoring

Liang

2012

Journal of Public Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may

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“…These data heavily oversample high-income filers, which research suggests play a critical role in determining overall responses to changes in tax rates (Navratil 1995;Moffitt and Wilhelm 2000;Gruber and Saez 2002;Saez 2004). I find that when employing the richest set of income controls, estimates are larger for the longer term than for the short term.…”

Section: Introductionmentioning

confidence: 99%

The Elasticity of Taxable Income during the 1990s: New Estimates and Sensitivity Analyses

Giertz

2010

Southern Economic Journal

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Over the past two decades, the elasticity of taxable income has emerged as the central parameter for assessing efficiency and revenue implications from changes to tax policy. This article estimates short-and longer-run responses of taxable (and gross) income to changes in tax rates using panels of U.S. tax returns for the 1990s. With the richest set of income controls, income-weighted elasticity estimates range from 0.19 to 0.33, depending on whether responses are measured over one-or three-year intervals. An alternative approach designed to capture delayed and anticipatory responses yields much larger estimates-ranging from 0.43 over the short term and from 0.78 to 1.46 over the longer term. A continuing obstacle to identification encountered here is that the income controls most likely to control for mean reversion and divergence within the income distribution are also the most likely to absorb independent variation in tax rates, also needed for identification.

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Taxation and the Labor Supply: Decisions of the Affluent

Cited by 87 publications

References 0 publications

Income Responses to Tax Changes—Evidence from the Norwegian Tax Reform

Income Responses to Tax Changes—Evidence from the Norwegian Tax Reform

Nonparametric structural estimation of labor supply in the presence of censoring

The Elasticity of Taxable Income during the 1990s: New Estimates and Sensitivity Analyses

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