Acceso usuarios
Alejandro Esteller Moré, Dirk Foremny
This paper studies behavioral responses of taxpayers to marginal tax rates. Spain is an interestingcase study, not only because over the last years there have been relatively large and frequent upwardchangesin the personal income tax, especially for top taxpayers, but also because these changeshave not been homogeneous across regions. Using the recently developed bunching approach, weinvestigate whether these changes have provoked responsesof taxpayers usinga large administrativedata set of individual tax declarations. We conclude taxpayers’ responses – if any – are very smalldespite that, for example, for top taxpayers (those with taxable income above 300,000 euros) the marginal tax rate hasincreased up to 13 points (from 43 to 56%) in some regionsduring the period analyzed (2009-12). No differences seem to emerge either along time (no evidence of dynamicresponses) or across types of income (self-employed income vs. laborincome).To confirm these results, we perform a difference-in-difference regression model based on repeated cross-section data. Incoherence with the bunching approach, the estimated responses are certainly very small, such that fortop taxpayers, the elasticity of taxable income is aslow as 1.4%.
