Question

Define the “after tax share” as 1 minus the marginal tax rate. Heim [2009] recently estimated the elasticity of taxable income with respect to the after tax share is 1.2 for people with incomes above $ 500,000. If this estimate is correct, what are the revenue consequences of raising the marginal tax rate on very high income people from 35 percent to 40 percent?


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  • CreatedMarch 25, 2015
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