Behavioral responses to proposed high income tax rate increases
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Behavioral responses to proposed high income tax rate increases an evaluation of the Feldstein-Feenberg study by Jane Gravelle

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Published by Congressional Research Service, Library of Congress in [Washington, D.C.] .
Written in English


  • Income tax -- Law and legislation -- United States

Book details:

Edition Notes

StatementJane G. Gravelle
SeriesMajor studies and issue briefs of the Congressional Research Service -- 1993, reel 10, fr. 00227
ContributionsLibrary of Congress. Congressional Research Service
The Physical Object
Pagination11 p.
Number of Pages11
ID Numbers
Open LibraryOL15461042M

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Behavioral Responses to Taxes: Lessons from the EITC and Labor Supply Nada Eissa, Hilary Hoynes. NBER Working Paper No. Issued in November NBER Program(s):Labor Studies, Public Economics Twenty-two million families currently receive a total of $34 billion dollars in benefits from the Earned Income Tax Credit (EITC). two terms in their model—one negative (suggesting a decrease in income reported as the tax rate increases), and another, which is most probably positive, assuming that taxpayers’ risk aversion. 2. IRS (). 3. Strictly speaking, my analysis quantifies such behavioral responses, but it does not address why taxpayers behave the way they do. Then, if these tax-induced behavioral responses are relatively greater among the rich, the pre-tax income of the rich increases relative to that of the poor, thus leading to a further increase in net income inequality. That is, flattening PIT schedules increases income inequality due to changesAuthor: Denvil Duncan. Chapter 8 Bade Microeconomics. STUDY. Flashcards. Learn. Write. Spell. Test. PLAY. Match. Gravity. Created by. anamacarenco_babalu. If the average tax rate increases as income increases then the. Tax is a progressive tax. If the average tax rate remains constant as income changes the tax is.

is the total federal income tax divided by the taxpayers economic income (taxable income+nontaxable income) it includes all the taxpayers income Proportional rate structure a tax for which the average tax rate remains the same as . 1 Our revenue estimates incorporate microdynamic behavioral responses. We assume the elasticity of taxable income with respect to the net of tax rate (ETI) rises with income and equals for those in the top percent of the income distribution. Because the TCJA expanded the individual income tax base, we reduce our elasticities by one.   7 Tax Policy Center, "Earned Income Tax Credit Parameters ," November 3, 8 Estimate for from Tax Policy Center, Table T, , J   Income effect: On the other hand, someone facing a high marginal tax rate may work more hours in order to reach a particular after-tax income level, such as the level needed to afford rent and other basics. (Many low-wage workers work multiple jobs and long hours, despite low pay, to secure a more adequate income.).

  The study finds that an increase in the marginal income tax rate leads to a decrease in the average skill of the N.B.A. free agents that migrate to that team. Unlike in baseball, basketball teams in high-tax jurisdictions actually end up with a worse free-agent talent pool, all else equal. The Norwegian tax reform of implied substantial increases in the net-of-tax rate (1 minus the change in the marginal tax rate) for high-income earners, and this paper provides measures of . A flat tax (short for flat-rate tax) is a tax system with a constant marginal rate, usually applied to individual or corporate income.A true flat tax would be a proportional tax, but implementations are often progressive and sometimes regressive depending on deductions and exemptions in the tax base. There are various tax systems that are labeled "flat tax" even though they are . CAPITAL GAINS TAX INCREASES The President proposed two significant tax increases on capital gains. He would raise the top tax rate on long-term capital gains and qualifying dividends from 20 percent to percent. Including the effect of the percent ACA net investment income tax, that would make a top tax rate of 28 percent.