Income Responses to Tax Changes--Evidence From the Norwegian Tax Reform

Karl O. Aarbu and Thor Thoresen

National Tax Journal, 2001, vol. 54, issue 2, 319-38

Abstract: Several studies, conducted on U.S. data, have found rather strong income responses to changes in net-of-tax rates when treating tax reforms as "natural experiments" and applying the differences-of-differences estimator. Like the U.S. Tax Reform Act of 1986, the Norwegian tax reform of 1992 entailed substantial increases in the net-of-tax rate for high-income earners. This paper provides measures of the elasticity of taxable income with respect to these tax rate changes. We control for the impact of other tax changes and several non-tax factors on income growth. Our estimates of the elasticity of taxable income with respect to the net-of-tax rate range between -0.6 and 0.2, substantially lower than similar estimates from analyses on U.S. data.

Date: 2001
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (52)

Downloads: (external link)
https://doi.org/10.17310/ntj.2001.2.06 (application/pdf)
https://doi.org/10.17310/ntj.2001.2.06 (text/html)
Access is restricted to subscribers and members of the National Tax Association.

Related works:
Working Paper: Income Responses to Tax Changes - Evidence from the Norwegian Tax Reform (1999)
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:ntj:journl:v:54:y:2001:i:2:p:319-38

Access Statistics for this article

National Tax Journal is currently edited by Stacy Dickert-Conlin and William M. Gentry

More articles in National Tax Journal from National Tax Association, National Tax Journal Contact information at EDIRC.
Bibliographic data for series maintained by The University of Chicago Press ().