The individual Laffer curve: evidence from the Spanish income tax
Ana Gamarra Rondine,
José Félix Sanz-Sanz,
María Arrazola
Abstract:This paper characterises the Laffer curve of each individual taxpayer in a schedular multi-rate income tax with income shifting. Analytical expressions for the revenue-maximising tax rate and the revenue-maximising elasticity are provided for the individual taxpayer and the aggregate population, as well as new estimates of the Elasticity of Taxable Income. Applying these to the Spanish income tax demonstrates that 44.72% (58.49%) of the taxpaying population in the non-savings tax base (savings tax base) is on … Show more
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