Marginal tax rates and income in the long run: Evidence from a structural estimation

• 成果类型: Article
• 署名作者: Macnamara, Patrick; Pidkuyko, Myroslav; Rossi, Raffaele
• 署名单位: University of Manchester; Banco de Espana; University of Birmingham
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2023.09.001
• 发表日期: 2024
• 关键词: Marginal tax rate changes Elasticity of taxable income Life-cycle Entrepreneurs Structural estimation

摘要

We estimate a life -cycle model of savings, labor productivity and entrepreneurs to measure the long -run response of income to marginal tax rate cuts in the US. Long -run tax elasticities of income are largest for the richest 1% but are also positive and substantial for other income groups. In equilibrium, entrepreneurs obtain higher returns on wealth. This increases the investment response of rich, high -return entrepreneurs, amplifying their income elasticity to tax cuts. This leads to a reallocation of capital which increases TFP, and generates a boost in wages that magnifies the estimated income response of the bottom 90% as well.