Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/82100
Authors: 
Le Maire, Daniel
Schjerning, Bertel
Year of Publication: 
2012
Series/Report no.: 
EPRU Working Paper Series 2012-04
Abstract: 
This paper proposes a dynamic extension to Saez (2010) bunching formula that allows us to distinguish bunching based on real responses and income shifting. We provide direct evidence of income shifting and pronounced bunching in taxable income for the case of Danish self-employed. If income shifting was neglected in this case, we would conclude that taxable incomes were highly sensitive to changes in marginal tax rates. We show, however, that more than half of the observed bunching in taxable income for the self-employed is driven by intertemporal income shifting, implying a structural elasticity in the range of 0.14-0.20
Subjects: 
Self-employment
tax bunching
retained pro?ts
tax avoidance
income shifting
JEL: 
H20
J20
Document Type: 
Working Paper

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