Singleton study on the effect of taxes on taxable earnings published in National Tax Journal
Jun 30, 2011
The Effect of Taxes on Taxable Earnings: Evidence from the 2001 and Related US Federal Tax Acts
Perry Singleton
National Tax Journal, June 2011
This study measures the elasticity of taxable earnings to the marginal tax price, identified by a marriage penalty relief provision contained in the Economic Growth and Tax Relief Reconciliation Act of 2001. The change in joint taxable earnings in response to the provision implies a joint elasticity ranging from 0.217 to 0.304. The joint response is driven by the taxable wage earnings of males, and does not reflect a shift in income from tax-deferred to taxable compensation, but an increase in total wage earnings.