The elasticity of taxable income in Spain: 1999–2014

Autor: Miguel Almunia, David Lopez-Rodriguez
Jazyk: angličtina
Rok vydání: 2019
Předmět:
Zdroj: SERIEs: Journal of the Spanish Economic Association, Vol 10, Iss 3-4, Pp 281-320 (2019)
Druh dokumentu: article
ISSN: 1869-4187
1869-4195
DOI: 10.1007/s13209-019-00208-x
Popis: 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.
Databáze: Directory of Open Access Journals
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