Do Taxpayers Bunch at Kink Points?

Emmanuel Saez

American Economic Journal: Economic Policy, 2010, vol. 2, issue 3, 180-212

Abstract: This paper uses tax return data to analyze bunching at the kink points of the US income tax schedule. We estimate the compensated elasticity of reported income with respect to (one minus) the marginal tax rate using bunching evidence. We find clear evidence of bunching around the first kink point of the Earned Income Tax Credit but concentrated solely among the self-employed. A simple tax evasion model can account for those results. We find evidence of bunching at the threshold of the first income tax bracket where tax liability starts but no evidence of bunching at any other kink point. (JEL H23, H24, H26)

JEL-codes: H23 H24 H26 (search for similar items in EconPapers)
Date: 2010
Note: DOI: 10.1257/pol.2.3.180
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Citations: View citations in EconPapers (713)

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Related works:
Working Paper: Do Taxpayers Bunch at Kink Points? (1999)
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