TY  - JOUR
AU  - Saez, Emmanuel
TI  - Taxing the Rich More: Preliminary Evidence from the 2013 Tax Increase
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 22798
PY  - 2016
Y2  - November 2016
DO  - 10.3386/w22798
UR  - http://www.nber.org/papers/w22798
L1  - http://www.nber.org/papers/w22798.pdf
N1  - Author contact info:
Emmanuel Saez
Department of Economics
University of California, Berkeley
530 Evans Hall #3880
Berkeley, CA 94720
Tel: 510/642-4631
Fax: 510/642-6615
E-Mail: saez@econ.berkeley.edu
M1  - published as Emmanuel Saez. "Taxing the Rich More: Preliminary Evidence from the 2013 Tax Increase," in Robert A. Moffitt, editor, "Tax Policy and the Economy, Volume 31" University of Chicago Press (2017)

M3  - presented at "Tax Policy and the Economy", September 22, 2016
AB  - This paper provides preliminary evidence on behavioral responses to taxation around the 2013 tax increase that raised top marginal tax rates on capital income by about 9.5 points and on labor income by about 6.5 points. Using published tabulated tax statistics from the Statistics of Income division of the IRS, we find that reported top 1% incomes were significantly higher in 2012 than in 2013, implying a large short-run elasticity of reported income with respect to the net-of-tax rate in excess of one. This large short-run elasticity is due to income retiming for tax avoidance purposes and is particularly high for realized capital gains and dividends, and highest at the very top of the income distribution. However, comparing 2011 and 2015 top incomes uncovers only a small medium-term response to the tax increase as top income shares resumed their upward trend after 2013. Overall, we estimate that at most 20% of the projected tax revenue increase from the 2013 tax reform is lost through behavioral responses. This implies that the 2013 tax increase was an efficient way to raise revenue.
ER  -