Estimating the elasticity of taxable income: Evidence from top Japanese taxpayers

Takeshi Miyazaki and Ryo Ishida

Japan and the World Economy, 2022, vol. 61, issue C

Abstract: 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.

Keywords: Behavioral response; Choice of deductions; Elasticity of taxable income; Personal income tax; Top taxpayers (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0922142522000020
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Estimating the Elasticity of Taxable Income: Evidence from Top Japanese Taxpayers (2016)
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:eee:japwor:v:61:y:2022:i:c:s0922142522000020

DOI: 10.1016/j.japwor.2022.101116

Access Statistics for this article

Japan and the World Economy is currently edited by Robert Dekle and Yasushi Hamao

More articles in Japan and the World Economy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().