Taxation and Top Incomes in Canada

Kevin Milligan and Michael Smart

No 20489, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We estimate the elasticity of reported income with respect to tax rates for high earners using subnational variation across Canadian provinces. We argue this allows for better identification of tax elasticities than the existing literature. We find that elasticities of reported income at the provincial level are large for incomes in the top one percent, but small for lower earners. There are strong indications that the response happens both through earned and capital income. While our estimated elasticities are large, changes in tax rates cannot explain much of the overall long-run trend of higher income concentration in Canada.

JEL-codes: D31 H21 H24 (search for similar items in EconPapers)
Date: 2014-09
New Economics Papers: this item is included in nep-pbe and nep-pub
Note: PE
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published as Kevin Milligan & Michael Smart, 2015. "Taxation and top incomes in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 48(2), pages 655-681, May.
Published as Kevin Milligan & Michael Smart, 2015. "Taxation and top incomes in Canada," Canadian Journal of Economics/Revue canadienne d'économique, vol 48(2), pages 655-681.

Downloads: (external link)
http://www.nber.org/papers/w20489.pdf (application/pdf)

Related works:
Journal Article: Taxation and top incomes in Canada (2015)
Journal Article: Taxation and top incomes in Canada (2015)
Working Paper: Taxation and top incomes in Canada (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:20489

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w20489

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().