The Incentive Effects of Marginal Tax Rates: Evidence from the Interwar Era

• 成果类型: Article
• 署名作者: Romer, Christina D.; Romer, David H.
• 署名单位: University of California System; University of California Berkeley
• 刊物名称: AMERICAN ECONOMIC JOURNAL-ECONOMIC POLICY
• ISSN/ISSBN: 1945-7731
• DOI: 10.1257/pol.6.3.242
• 发表日期: 2014
• 页码: 242-281
• 关键词: taxable income; elasticity; REFORM

摘要

This paper uses the interwar United States as a laboratory for investigating the incentive effects of marginal income tax rates. We examine the impact of the large changes in rates in this period on taxable income using time-series/cross-section analysis of data by small slices of the income distribution. We find that the effect operated in the expected direction but was economically small, and that it is precisely estimated and highly robust. We also find suggestive time-series evidence of a positive impact of marginal rate cuts on business formation, but no evidence of an important effect on other indicators of investment.