The Resource The elasticity of taxable income in New Zealand

The elasticity of taxable income in New Zealand

Label
The elasticity of taxable income in New Zealand
Title
The elasticity of taxable income in New Zealand
Creator
Subject
Language
  • eng
  • eng
Summary
This paper reports estimates of the elasticity of taxable income with respect to the net-of-tax rate for New Zealand taxpayers. The relative stability of the New Zealand personal income tax system, in terms of marginal rates, thresholds and the tax base, provides helpful conditions for deriving these estimates. The elasticity of taxable income was estimated to be substantially higher for the highest income groups. Changes in the timing of income flows for the higher income recipients were found to be an important response to the announcement of a new higher rate bracket. The marginal welfare costs of personal income taxation were consistent across years, being relatively small for all but the higher tax brackets. For the top marginal rate bracket of 39 per cent, the welfare cost of raising an extra dollar of tax revenue was estimated to be well in excess of a dollar. Implications of the findings are that: disincentive effects of high top marginal rates can be substantial even when labour supply responses are small; the welfare costs of increases in top marginal tax rates can be high; and announcement effects of tax policy changes can lead to considerable income shifting between time periods
Citation source
In: Fiscal studies. - London. - Vol. 33 (2012), no. 3 ; p. 287-303
http://library.link/vocab/creatorName
  • Claus, I
  • Creedy, J
  • Teng, J
Geographic coverage
Pacific Islands
Language note
English
http://library.link/vocab/subjectName
  • individual income tax
  • marginal tax rate
  • brackets
  • tax burden
Label
The elasticity of taxable income in New Zealand
Link
https://library.ibfd.org/custom/web/SD_PDF/scans/2012/E-F/FISCST/3_287-303.zip
Publication
Note
20121017

Library Locations

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