Authors: Áron Kiss Pálma Mosberger
Publish Date: 2014/06/05
Volume: 48, Issue: 2, Pages: 883-908
Abstract
The paper studies how highincome taxpayers responded to the introduction of the “extraordinary tax on individuals” in Hungary in 2007 The study is based on a panel of tax returns containing information on 10 of tax filers from 2005 and three subsequent years We estimate the elasticity of taxable income with respect to the marginal netoftax rate and find that the taxable income of Hungarian high earners is moderately responsive to taxation the estimated elasticity is about 024 We also find evidence for a sizeable income effect The estimated effect is not caused by income shiftingThis research had been conducted before Áron Kiss started working at the European Commission All opinions expressed in this paper are those of the authors and do not represent the views of their past or present institutions An earlier version of the paper was published as a working paper at the Central Bank of Hungary Kiss and Mosberger 2011 Results of the working paper version have been discussed in a survey article for a nontechnical audience Benczúr et al 2013 The authors would like to thank Péter Benczúr for his support throughout the project Dóra Benedek Péter Elek Csanád Sándor Kiss and Ágota Scharle for comments on earlier drafts of the paper participants of the 2011 conference of the IIPF in Ann Arbor Michigan the 2011 EEAESEM meeting in Oslo the 2010 meeting of the Hungarian Society of Economics MKE in Budapest and seminar participants at the University of Münster the Ludwig–MaximiliansUniversity in Munich the Institute for Economics of the Hungarian Academy of Science and the Central Bank of Hungary for useful comments and suggestions Any remaining error is ours
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