Intertemporal Labor Supply Substitution? Evidence from the Swiss Income Tax Holidays

• 成果类型: Article
• 署名作者: Martinez, Isabel Z.; Saez, Emmanuel; Siegenthaler, Michael
• 署名单位: Swiss Federal Institutes of Technology Domain; ETH Zurich; University of California System; University of California Berkeley
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20180746
• 发表日期: 2021
• 页码: 506-546
• 关键词: taxation; COMPETITION; rates

摘要

This paper estimates intertemporal labor supply responses to two-year long income tax holidays staggered across Swiss cantons. Cantons shifted from an income tax system based on the previous two years' income to a standard annual pay as you earn system, leaving two years of income untaxed. We find significant but quantitatively very small responses of wage earnings with an intertemporal elasticity of 0.025 overall. High wage income earners and especially the self-employed display larger responses with elasticities around 0.1 and 0.25, respectively, most likely driven by tax avoidance. We find no effects along the extensive margin at all.