Salience and the Elasticity of Taxable Income: Evidence from Top-bracket Tax Reforms

Xavier Dufour, Pierre-Carl Michaud and Michael Smart

No 34731, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We estimate heterogeneous responses to top-bracket tax reforms using a triple-difference design that exploits variation in tax rate changes and the thresholds at which they apply. This strategy identifies behavioral responses even in the presence of unobservable shocks to the income distribution. Higher-income taxpayers respond more to top-rate changes, but our results indicate that this reflects the salience of the reforms—the larger mechanical change in average tax rates at higher incomes—rather than heterogeneity in substitution elasticities. We discuss implications for the revenue and distributional effects of top-bracket tax reforms.

JEL-codes: D31 H21 H24 (search for similar items in EconPapers)
Date: 2026-01
Note: PE
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.nber.org/papers/w34731.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

Related works:
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:nbr:nberwo:34731

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w34731
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().