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Economic Behaviour and Taxation
Over several decades there have been major changes to the way public economists investigate behavioural responses to taxation. This includes areas such as the supply of labour, charitable giving, savings, capital gains realisations, mobility, bequests, family structure, reported income and tax evasion. Recent research has utilised new data sets and applied new empirical methods, including laboratory experiments, natural field experiments and controlled field experiments. Other disciplines, especially psychology, are increasingly contributing to the application of behavioural (or cognitive) economics, but the lessons from this work are unevenly disseminated. This important volume brings together the most important scholarly articles on how taxes affect individual behaviour, highlighting current knowledge on behavioural responses to taxation, new thinking about the relevant issues and analysis of useful policy options.
More Information
Contributors
Contents
More Information
Over several decades there have been major changes to the way public economists investigate behavioural responses to taxation. This includes areas such as the supply of labour, charitable giving, savings, capital gains realisations, mobility, bequests, family structure, reported income and tax evasion. Recent research has utilised new data sets and applied new empirical methods, including laboratory experiments, natural field experiments and controlled field experiments. Other disciplines, especially psychology, are increasingly contributing to the application of behavioural (or cognitive) economics, but the lessons from this work are unevenly disseminated. This important volume brings together the most important scholarly articles on how taxes affect individual behaviour, highlighting current knowledge on behavioural responses to taxation, new thinking about the relevant issues and analysis of useful policy options.
Contributors
33 articles, dating from 1996 to 2014
Contributors include: A. Brooks, R. Chetty, E. Duflo, A. Goolsbee, H. Kleven, J. List, J. Martinez-Vazquez, J. Poterba, E. Saez, J. Slemrod
Contributors include: A. Brooks, R. Chetty, E. Duflo, A. Goolsbee, H. Kleven, J. List, J. Martinez-Vazquez, J. Poterba, E. Saez, J. Slemrod
Contents
Contents:
PART I LABOUR SUPPLY
1. Richard Blundell, Alan Duncan and Costas Meghir (1998), ‘Estimating Labor Supply Responses using Tax Reforms’, Econometrica, 66 (4), July, 827–61
2. Sören Blomquist and Whitney Newey (2002), ‘Nonparametric Estimation with Nonlinear Budget Sets’, Econometrica, 70 (6), November, 2455–80
3. Anil Kumar (2008), ‘Labor Supply, Deadweight Loss and Tax Reform
PART II TAXABLE INCOME
4. Austan Goolsbee (2000), ‘What Happens When You Tax the Rich? Evidence from Executive Compensation’, Journal of Political Economy, 108 (2), April, 352–78
5. Emmanuel Saez (2010), ‘Do Taxpayers Bunch at Kink Points?’, American Economic Journal: Economic Policy, 2 (3), August, 180–212
6. Wojciech Kopczuk (2005), ‘Tax Bases, Tax Rates and the Elasticity of Reported Income’, Journal of Public Economics, 89 (11–12), December, 2093–119
PART III TRANSFERS AND INCOME TAX CREDITS
7. Raj Chetty, John N. Friedman and Emmanuel Saez (2013), ‘Using Differences in Knowledge Across Neighborhoods to Uncover the Impacts of the EITC on Earnings’, American Economic Review, 103 (7), December, 2683–721
8. Jeffrey Grogger (2003), ‘The Effects of Time Limits, the EITC, and Other Policy Changes on Welfare Use, Work, and Income among Female-Headed Families’, Review of Economics and Statistics, 85 (2), May, 394–408
9. Bruce D. Meyer and Dan T. Rosenbaum (2001), ‘Welfare, the Earned Income Tax Credit, and the Labor Supply of Single Mothers’, Quarterly Journal of Economics, 116 (3), August, 1063–114
PART IV MOBILITY
10. Henrik Jacobsen Kleven, Camille Landais and Emmanuel Saez (2013), ‘Taxation and International Migration of Superstars: Evidence from the European Football Market’, American Economic Review, 103 (5), August, 1892–924
11. Charles L. Ballard and Jaimin Lee (2007), ‘Internet Purchases, Cross-Border Shopping, and Sales Taxes’, National Tax Journal, LX (4), December, 711–25
12. Austan Goolsbee (2000), ‘In a World without Borders: The Impact of Taxes on Internet Commerce’, Quarterly Journal of Economics, 115 (2), May, 561–76
PART V CAPITAL GAINS AND ENTREPRENEURIAL ACTIVITIES
13. Zoran Ivković, James Poterba and Scott Weisbenner (2005), ‘Tax-Motivated Trading by Individual Investors’, American Economic Review, 95 (5), December, 1605–630
14. Julie Berry Cullen and Roger H. Gordon (2007), ‘Taxes and Entrepreneurial Risk-Taking: Theory and Evidence for the U.S.’, Journal of Public Economics, 91 (7–8), August, 1479–505
15. Åsa Hansson (2012), ‘Tax Policy and Entrepreneurship: Empirical Evidence from Sweden’, Small Business Economics, 38 (4), May, 495–513
PART VI SAVING
16. Esther Duflo, William Gale, Jeffrey Liebman, Peter Orszag and Emmanuel Saez (2006), ‘Saving Incentives for Low- and Middle- Income Families: Evidence from a Field Experiment with H&R Block’, Quarterly Journal of Economics, 121 (4), November, 1311–46
17. Alexander M. Gelber (2011), ‘How Do 401(k)s Affect Saving? Evidence from Changes in 401(k) Eligibility’, American Economic Journal: Economic Policy, 3 (4), November, 103–22
18. James Alm and Asmaa El-Ganainy (2013), ‘Value-Added Taxation and Consumption’, International Tax and Public Finance, 20 (1), February, 105–28
PART VII BEQUESTS
19. David Joulfaian (2000), ‘Estate Taxes and Charitable Bequests by the Wealthy’, National Tax Journal, LIII (3, Part 2), September, 743–63
20. Wojciech Kopczuk and Joel Slemrod (2003), ‘Dying to Save Taxes: Evidence from Estate-Tax Returns on the Death Elasticity’, Review of Economics and Statistics, 85 (2), May, 256–65
21. B. Douglas Bernheim, Robert J. Lemke and John Karl Scholz (2004), ‘Do Estate and Gift Taxes Affect the Timing of Private Transfers?’, Journal of Public Economics, 88 (12), December, 2617–34
PART VIII FAMILY STRUCTURE
22. James Alm and Leslie A. Whittington (1997), ‘Income Taxes and the Timing of Marital Decisions’, Journal of Public Economics, 64 (2), May, 219–40
23. Jeff Grogger and Stephen G. Bronars (2001), ‘The Effect of Welfare Payments on the Marriage and Fertility Behavior of Unwed Mothers: Results from a Twins Experiment’, Journal of Political Economy, 109 (3), June, 529–45
24. Reagan Baughman and Stacy Dickert-Conlin (2009), ‘The Earned Income Tax Credit and Fertility’, Journal of Population Economics, 22 (3), July, 537–63
PART IX TAX EVASION
25. James Alm, Betty R. Jackson and Michael McKee (2009), ‘Getting the Word Out: Enforcement Information Dissemination and Compliance Behavior’, Journal of Public Economics, 93 (3–4), April, 392–402
26. Henrik Jacobsen Kleven, Martin B. Knudsen, Claus Thustrup Kreiner, Søren Pedersen and Emmanuel Saez (2011), ‘Unwilling or Unable to Cheat? Evidence from a Tax Audit Experiment in Denmark’, Econometrica, 79 (3), May, 651–92
27. Yuriy Gorodnichenko, Jorge Martinez-Vazquez and Klara Sabirianova Peter (2009), ‘Myth and Reality of Flat Tax Reform: Micro Estimates of Tax Evasion Response and Welfare Effects in Russia’, Journal of Political Economy, 117 (3), June, 504–54
PART X CHARITABLE GIVING
28. Dean Karlan and John A. List (2007), ‘Does Price Matter in Charitable Giving? Evidence from a Large-Scale Natural Field Experiment’, American Economic Review, 97 (5), December, 1774–93
29. Arthur C. Brooks (2007), ‘Income Tax Policy and Charitable Giving’, Journal of Policy Analysis and Management, 26 (3), Summer, 599‒612
30. Gerald E. Auten, Holger Sieg and Charles T. Clotfelter (2002), ‘Charitable Giving, Income, and Taxes: An Analysis of Panel Data’, American Economic Review, 92 (1), March, 371–82
PART XI SALIENCE, SELF-CONTROL, AND BEHAVIOURAL ECONOMICS
31. Raj Chetty, Adam Looney and Kory Kroft (2009), ‘Salience and Taxation: Theory and Evidence’, American Economic Review, 99 (4), September, 1145–77
32. Amy Finkelstein (2009), ‘E-ZTax: Tax Salience and Tax Rates’, Quarterly Journal of Economics, 124 (3), August, 969–1010
33. Raj Chetty, John N. Friedman, Søren Leth-Petersen, Torben Heien Nielsen and Tore Olsen (2014), ‘Active vs. Passive Decisions and Crowd-Out in Retirement Savings Accounts: Evidence from Denmark’, Quarterly Journal of Economics, 129 (3), August, 1141–219
Index
PART I LABOUR SUPPLY
1. Richard Blundell, Alan Duncan and Costas Meghir (1998), ‘Estimating Labor Supply Responses using Tax Reforms’, Econometrica, 66 (4), July, 827–61
2. Sören Blomquist and Whitney Newey (2002), ‘Nonparametric Estimation with Nonlinear Budget Sets’, Econometrica, 70 (6), November, 2455–80
3. Anil Kumar (2008), ‘Labor Supply, Deadweight Loss and Tax Reform
PART II TAXABLE INCOME
4. Austan Goolsbee (2000), ‘What Happens When You Tax the Rich? Evidence from Executive Compensation’, Journal of Political Economy, 108 (2), April, 352–78
5. Emmanuel Saez (2010), ‘Do Taxpayers Bunch at Kink Points?’, American Economic Journal: Economic Policy, 2 (3), August, 180–212
6. Wojciech Kopczuk (2005), ‘Tax Bases, Tax Rates and the Elasticity of Reported Income’, Journal of Public Economics, 89 (11–12), December, 2093–119
PART III TRANSFERS AND INCOME TAX CREDITS
7. Raj Chetty, John N. Friedman and Emmanuel Saez (2013), ‘Using Differences in Knowledge Across Neighborhoods to Uncover the Impacts of the EITC on Earnings’, American Economic Review, 103 (7), December, 2683–721
8. Jeffrey Grogger (2003), ‘The Effects of Time Limits, the EITC, and Other Policy Changes on Welfare Use, Work, and Income among Female-Headed Families’, Review of Economics and Statistics, 85 (2), May, 394–408
9. Bruce D. Meyer and Dan T. Rosenbaum (2001), ‘Welfare, the Earned Income Tax Credit, and the Labor Supply of Single Mothers’, Quarterly Journal of Economics, 116 (3), August, 1063–114
PART IV MOBILITY
10. Henrik Jacobsen Kleven, Camille Landais and Emmanuel Saez (2013), ‘Taxation and International Migration of Superstars: Evidence from the European Football Market’, American Economic Review, 103 (5), August, 1892–924
11. Charles L. Ballard and Jaimin Lee (2007), ‘Internet Purchases, Cross-Border Shopping, and Sales Taxes’, National Tax Journal, LX (4), December, 711–25
12. Austan Goolsbee (2000), ‘In a World without Borders: The Impact of Taxes on Internet Commerce’, Quarterly Journal of Economics, 115 (2), May, 561–76
PART V CAPITAL GAINS AND ENTREPRENEURIAL ACTIVITIES
13. Zoran Ivković, James Poterba and Scott Weisbenner (2005), ‘Tax-Motivated Trading by Individual Investors’, American Economic Review, 95 (5), December, 1605–630
14. Julie Berry Cullen and Roger H. Gordon (2007), ‘Taxes and Entrepreneurial Risk-Taking: Theory and Evidence for the U.S.’, Journal of Public Economics, 91 (7–8), August, 1479–505
15. Åsa Hansson (2012), ‘Tax Policy and Entrepreneurship: Empirical Evidence from Sweden’, Small Business Economics, 38 (4), May, 495–513
PART VI SAVING
16. Esther Duflo, William Gale, Jeffrey Liebman, Peter Orszag and Emmanuel Saez (2006), ‘Saving Incentives for Low- and Middle- Income Families: Evidence from a Field Experiment with H&R Block’, Quarterly Journal of Economics, 121 (4), November, 1311–46
17. Alexander M. Gelber (2011), ‘How Do 401(k)s Affect Saving? Evidence from Changes in 401(k) Eligibility’, American Economic Journal: Economic Policy, 3 (4), November, 103–22
18. James Alm and Asmaa El-Ganainy (2013), ‘Value-Added Taxation and Consumption’, International Tax and Public Finance, 20 (1), February, 105–28
PART VII BEQUESTS
19. David Joulfaian (2000), ‘Estate Taxes and Charitable Bequests by the Wealthy’, National Tax Journal, LIII (3, Part 2), September, 743–63
20. Wojciech Kopczuk and Joel Slemrod (2003), ‘Dying to Save Taxes: Evidence from Estate-Tax Returns on the Death Elasticity’, Review of Economics and Statistics, 85 (2), May, 256–65
21. B. Douglas Bernheim, Robert J. Lemke and John Karl Scholz (2004), ‘Do Estate and Gift Taxes Affect the Timing of Private Transfers?’, Journal of Public Economics, 88 (12), December, 2617–34
PART VIII FAMILY STRUCTURE
22. James Alm and Leslie A. Whittington (1997), ‘Income Taxes and the Timing of Marital Decisions’, Journal of Public Economics, 64 (2), May, 219–40
23. Jeff Grogger and Stephen G. Bronars (2001), ‘The Effect of Welfare Payments on the Marriage and Fertility Behavior of Unwed Mothers: Results from a Twins Experiment’, Journal of Political Economy, 109 (3), June, 529–45
24. Reagan Baughman and Stacy Dickert-Conlin (2009), ‘The Earned Income Tax Credit and Fertility’, Journal of Population Economics, 22 (3), July, 537–63
PART IX TAX EVASION
25. James Alm, Betty R. Jackson and Michael McKee (2009), ‘Getting the Word Out: Enforcement Information Dissemination and Compliance Behavior’, Journal of Public Economics, 93 (3–4), April, 392–402
26. Henrik Jacobsen Kleven, Martin B. Knudsen, Claus Thustrup Kreiner, Søren Pedersen and Emmanuel Saez (2011), ‘Unwilling or Unable to Cheat? Evidence from a Tax Audit Experiment in Denmark’, Econometrica, 79 (3), May, 651–92
27. Yuriy Gorodnichenko, Jorge Martinez-Vazquez and Klara Sabirianova Peter (2009), ‘Myth and Reality of Flat Tax Reform: Micro Estimates of Tax Evasion Response and Welfare Effects in Russia’, Journal of Political Economy, 117 (3), June, 504–54
PART X CHARITABLE GIVING
28. Dean Karlan and John A. List (2007), ‘Does Price Matter in Charitable Giving? Evidence from a Large-Scale Natural Field Experiment’, American Economic Review, 97 (5), December, 1774–93
29. Arthur C. Brooks (2007), ‘Income Tax Policy and Charitable Giving’, Journal of Policy Analysis and Management, 26 (3), Summer, 599‒612
30. Gerald E. Auten, Holger Sieg and Charles T. Clotfelter (2002), ‘Charitable Giving, Income, and Taxes: An Analysis of Panel Data’, American Economic Review, 92 (1), March, 371–82
PART XI SALIENCE, SELF-CONTROL, AND BEHAVIOURAL ECONOMICS
31. Raj Chetty, Adam Looney and Kory Kroft (2009), ‘Salience and Taxation: Theory and Evidence’, American Economic Review, 99 (4), September, 1145–77
32. Amy Finkelstein (2009), ‘E-ZTax: Tax Salience and Tax Rates’, Quarterly Journal of Economics, 124 (3), August, 969–1010
33. Raj Chetty, John N. Friedman, Søren Leth-Petersen, Torben Heien Nielsen and Tore Olsen (2014), ‘Active vs. Passive Decisions and Crowd-Out in Retirement Savings Accounts: Evidence from Denmark’, Quarterly Journal of Economics, 129 (3), August, 1141–219
Index
