TY - JOUR
T1 - Estimating the elasticity of taxable income
T2 - Evidence from top Japanese taxpayers
AU - Miyazaki, Takeshi
AU - Ishida, Ryo
N1 - Funding Information:
We thank Shun-ichiro Bessho, Takero Doi, Sun Go, Masayoshi Hayashi, Shinsuke Ito, Yukinobu Kitamura, Chiaki Moriguchi, Thor O. Thoresen, Hiroyuki Yashio, and the participants of the 2015 Autumn Meeting of the Japan Association for Applied Economics, of the 2016 Spring Meeting of the Japan Economic Association, of the 73rd and 74th Annual Congress of the Japan Institute of Public Finance, 2017 IIPF, and of the seminars held at Center for Intergenerational Studies in Hitotsubashi University, at the Policy Research Institute in the Ministry of Finance Japan, and at Doshisha University for their helpful and insightful comments. The views expressed herein are those of the authors, and they do not necessarily reflect the opinions of the organizations to which the authors belong. Miyazaki gratefully acknowledges the financial support from the Nomura Foundation. Any remaining errors are the sole responsibility of the authors.
Funding Information:
We thank Shun-ichiro Bessho, Takero Doi, Sun Go, Masayoshi Hayashi, Shinsuke Ito, Yukinobu Kitamura, Chiaki Moriguchi, Thor O. Thoresen, Hiroyuki Yashio, and the participants of the 2015 Autumn Meeting of the Japan Association for Applied Economics, of the 2016 Spring Meeting of the Japan Economic Association, of the 73rd and 74th Annual Congress of the Japan Institute of Public Finance , 2017 IIPF, and of the seminars held at Center for Intergenerational Studies in Hitotsubashi University, at the Policy Research Institute in the Ministry of Finance Japan, and at Doshisha University for their helpful and insightful comments. The views expressed herein are those of the authors, and they do not necessarily reflect the opinions of the organizations to which the authors belong. Miyazaki gratefully acknowledges the financial support from the Nomura Foundation. Any remaining errors are the sole responsibility of the authors.
Publisher Copyright:
© 2022 Elsevier B.V.
PY - 2022/3
Y1 - 2022/3
N2 - This study aims to estimate the elasticity of taxable income (ETI) with regard to the net-of-tax rate, precisely in terms of potential for the margin arising from the behavioral response. We use panel data from top Japanese taxpayers in Tokyo during 1986–1989 and focus on the tax policy changes caused by the 1987–1989 comprehensive tax reform, which substantially reduced the top marginal tax rates. It is found that the ETI with regard to the net-of-tax rate is approximately 0.158–0.226, considerably lower than those for the United States and many European countries. One possible reason for the small ETI estimates is the absence of the behavioral response in terms of choice of deductions in this study.
AB - This study aims to estimate the elasticity of taxable income (ETI) with regard to the net-of-tax rate, precisely in terms of potential for the margin arising from the behavioral response. We use panel data from top Japanese taxpayers in Tokyo during 1986–1989 and focus on the tax policy changes caused by the 1987–1989 comprehensive tax reform, which substantially reduced the top marginal tax rates. It is found that the ETI with regard to the net-of-tax rate is approximately 0.158–0.226, considerably lower than those for the United States and many European countries. One possible reason for the small ETI estimates is the absence of the behavioral response in terms of choice of deductions in this study.
UR - http://www.scopus.com/inward/record.url?scp=85123751432&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85123751432&partnerID=8YFLogxK
U2 - 10.1016/j.japwor.2022.101116
DO - 10.1016/j.japwor.2022.101116
M3 - Article
AN - SCOPUS:85123751432
VL - 61
JO - Japan and the World Economy
JF - Japan and the World Economy
SN - 0922-1425
M1 - 101116
ER -