The elasticity of taxable income of high earners: evidence from Hungary

Áron Kiss and Palma Filep-Mosberger

Empirical Economics, 2015, vol. 48, issue 2, 883-908

Abstract: The paper studies how high-income taxpayers responded to the introduction of the “extraordinary tax on individuals” in Hungary in 2007. The study is based on a panel of tax returns containing information on 10 % of tax filers from 2005 and three subsequent years. We estimate the elasticity of taxable income with respect to the marginal net-of-tax rate and find that the taxable income of Hungarian high earners is moderately responsive to taxation: the estimated elasticity is about 0.24. We also find evidence for a sizeable income effect. The estimated effect is not caused by income shifting. Copyright Springer-Verlag Berlin Heidelberg 2015

Keywords: Taxable income elasticity; Personal income tax; Tax avoidance; Income shifting; Income effect; H20; H24; H31; J22 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
http://hdl.handle.net/10.1007/s00181-014-0809-7 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: The elasticity of taxable income of high earners: Evidence from Hungary (2011)
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:spr:empeco:v:48:y:2015:i:2:p:883-908

Ordering information: This journal article can be ordered from
http://www.springer. ... rics/journal/181/PS2

DOI: 10.1007/s00181-014-0809-7

Access Statistics for this article

Empirical Economics is currently edited by Robert M. Kunst, Arthur H.O. van Soest, Bertrand Candelon, Subal C. Kumbhakar and Joakim Westerlund

More articles in Empirical Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().