Is there bunching in personal income tax? A legal-economic analysis of the Reduction of Net Work Income
DOI:
https://doi.org/10.17533/udea.le.n104a358868Keywords:
Tax benefits, Bunching, Tax avoidance, Personal Income TaxAbstract
This article aims to estimate whether a measure focused on the reduction of personal income tax for low-income groups - the reduction of net income from work (in its current wording between 2007 and 2016) - could lead to bunching behavior, that is, grouping strategic of taxpayers in certain values of income distribution. To achieve this goal, the methodology proposed by Saez (2010) is followed, and the tax microdata base provided by the Personal Income Tax Filers Panel (2007-2016) is used. The results obtained do not seem to support (except in very specific cases) the existence of the aforementioned behavioral change.
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