Blomquist, Nils Sören; Kumar, Anil; Liang, Che-yuan; … - 2014 - This draft: April 2014
Given the key role of the taxable income elasticity in designing an optimal tax system there are many studies … attempting to estimate this elasticity. To account for nonlinear taxes these studies either use instrumental variables approaches … nonparametric estimation methods. We show how to nonparametrically estimate the conditional mean of taxable income imposing all the …