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Measuring Revenue-Maximising Elasticities of Taxable Income: Evidence for the US Income Tax

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dc.contributor.author Creedy, John
dc.contributor.author Gemmell, Norman
dc.date.accessioned 2014-01-23T01:15:22Z
dc.date.accessioned 2022-07-06T22:19:10Z
dc.date.available 2014-01-23T01:15:22Z
dc.date.available 2022-07-06T22:19:10Z
dc.date.copyright 2014
dc.date.issued 2014
dc.identifier.uri https://ir.wgtn.ac.nz/handle/123456789/18803
dc.description.abstract A recent review of empirical estimates of the elasticity of taxable income (ETI) concluded that ‘the US marginal top rate is far from the top of the Laffer curve’ (Saez et al, 2012, p.42). This paper provides a detailed examination of the analysis underlying this conclusion, and considers whether other tax rates in the US income tax system are on the ‘right’ side of the Laffer curve. Conceptual expressions for ‘Laffer-maximum’ or revenue-maximizing ETIs, based on readily observable parameters, are presented for individuals and groups of taxpayers in a multi-rate income tax system. Applying these to the US income tax in 2005, with its complex effective marginal rate structure, demonstrates that a wide range of revenue-maximizing ETI values can be expected for individual taxpayers within and across tax brackets, and in aggregate. For many taxpayers these revenue-maximizing ETIs are well within the range of empirically estimated elasticities. en_NZ
dc.format pdf en_NZ
dc.language.iso en_NZ
dc.publisher Te Herenga Waka—Victoria University of Wellington en_NZ
dc.relation.ispartofseries Working Papers in Public Finance ; 02/2014 en_NZ
dc.subject Income tax revenue en_NZ
dc.subject Revenue elasticity en_NZ
dc.subject Laffer Curve en_NZ
dc.title Measuring Revenue-Maximising Elasticities of Taxable Income: Evidence for the US Income Tax en_NZ
dc.type Text en_NZ
vuwschema.contributor.unit School of Accounting and Commercial Law en_NZ
vuwschema.subject.anzsrcfor 140215 Public Economics - Taxation and Revenue en_NZ
vuwschema.type.vuw Working or Occasional Paper en_NZ
vuwschema.subject.anzsrcforV2 380115 Public economics - taxation and revenue en_NZ
dc.rights.rightsholder www.victoria.ac.nz/sacl/about/cpf en_NZ

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