Giertz.

• Position: Taxable-income - Brief Article

Giertz reviews the literature on taxable-income elasticity, primarily focusing on empirical studies examining the U.S. tax changes of 1981, 1986, 1990, and 1993 and the bracket creep of the late 1970s and early 1980s. He provides background on the importance of the elasticity of taxable income, both for forecasting income tax revenue and for assessing the efficiency implications of tax rate changes. He then discusses the major methodological issues, emphasizing the difference in methodologies used and the sensitivity of estimates...