Maire, Daniel le; Schjerningo, Bertel - Economic Policy Research Unit (EPRU), Økonomisk Institut - 2012
This paper proposes a dynamic extension to Saez (2010) bunching formula that allows us to distinguish bunching based on … real responses and income shifting. We provide direct evidence of income shifting and pronounced bunching in taxable income … incomes were highly sensitive to changes in marginal tax rates. We show, however, that more than half of the observed bunching …