Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/205651
Authors: 
Creedy, John
Gemmell, Norman
Year of Publication: 
2013
Series/Report no.: 
New Zealand Treasury Working Paper No. 13/27
Publisher: 
New Zealand Government, The Treasury, Wellington
Abstract: 
The empirical literature on the elasticity of taxable income (ETI) sometimes questions whether estimated values are consistent with being on the revenue-increasing section of the Laffer curve, usually in the context of a single rate tax system or for top marginal rates. This paper develops conceptual expressions for this ‘Laffer-maximum' or revenuemaximising ETI for the multi-rate income tax systems commonly used in practice. Using the New Zealand income tax system in 2010 to illustrate its properties, the paper demonstrates that a wide range of revenue-maximising ETI values can be expected across individual taxpayers, across tax brackets and in aggregate.
Subjects: 
Income Tax Revenue
Elasticity of taxable income
revenue elasticity
Laffer Curve
JEL: 
H24
H31
H26
ISBN: 
978-0-478-40387-9
Creative Commons License: 
https://creativecommons.org/licenses/by/4.0/
Document Type: 
Working Paper

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