Market behaviour versus tax planning responses to changes in marginal income tax rates among older couples / by Derek Messacar.: CS11-0019/410E-PDF
"The standard model of labour supply predicts that individuals’ taxable incomes will bunch at convex kink points in the budget set created by government tax and transfer systems. However, empirical evidence of such behaviour is scarce. Using administrative tax data from Canada, this paper estimates bunching responses in taxable income among older individuals at discontinuities in marginal tax rates created by federal and provincial and territorial systems, from 2001 to 2012. The results show that bunching is prevalent across the income distribution, but this is mostly driven by married individuals from 2007 onward. Further analysis reveals this occurs predominantly because pensioners split some of their pension income with their spouses who tend to have lower marginal tax rates. Pensioners do this pursuant to the introduction of this tax planning program in the 2007 federal budget. These findings offer credible evidence of significant intra-household tax planning behaviour that depends on the availability of deductions"--Abstract, p. 5.
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publications.gc.ca/pub?id=9.860584&sl=0
| Department/Agency | Statistics Canada. Analytical Studies Branch. |
|---|---|
| Title | Market behaviour versus tax planning responses to changes in marginal income tax rates among older couples / by Derek Messacar. |
| Series title | Analytical Studies Branch research paper series, 1205-9153 ; no. 410 |
| Publication type | Series - View Master Record |
| Language | [English] |
| Other language editions | [French] |
| Format | Electronic |
| Electronic document | |
| Note(s) | "November 2018." Issued also in HTML format. Issued also in French under title: Comportement sur le marché et réactions de planification fiscale quant à l’incidence des variations des taux marginaux d’imposition sur le revenu des couples de personnes âgées. Includes bibliographical references. |
| Publishing information | [Ottawa?] : Statistics Canada, 2018. |
| Author / Contributor | Messacar, Derek. |
| Description | 41 p. : graphs |
| ISBN | 9780660275864 |
| Catalogue number |
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| Departmental catalogue number | 11F0019M No. 410 |
| Subject terms | Fiscal policy Market analysis Couples |
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