The Effect of Marginal Tax Rates on Taxable Income: A Panel Study of the 1988 Tax Flattening in Canada

Mary-Anne Sillamaa and Michael Veall

Social and Economic Dimensions of an Aging Population Research Papers from McMaster University

Abstract: Federal tax reform in 1988 flattened the Canadian personal income tax schedule, changing the marginal tax rates for many individuals. Using methods similar to those applied by Auten and Carroll (1999) in the study of the effects of the 1986 U.S. Tax Reform Act, we estimate the responsiveness of income to changes in taxes to be substantially smaller in Canada. However we find evidence of a much higher response in self-employment income, in the labour income of seniors and from those with high incomes.

Keywords: marginal tax rate effects on taxable income; tax avoidance (search for similar items in EconPapers)
JEL-codes: H24 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2000-08
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Citations: View citations in EconPapers (16)

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Related works:
Journal Article: The effect of marginal tax rates on taxable income: a panel study of the 1988 tax flattening in Canada (2001)
Working Paper: The Effect of Marginal Tax Rates on Taxable Income: A Panel Study of the 1988 Tax Flattening in Canada (2000)
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