Tax Responsiveness of the Rich: Revisiting Evidence from Executive Compensation
نویسنده
چکیده
This paper measures the responsiveness of taxable income to changes in the marginal tax rate using panel data on executive compensation since 1992. It exploits variation from four tax acts: the Omnibus Budget Reconciliation Act of 1993, the Economic Growth and Tax Relief Reconciliation Act of 2001, the Jobs and Growth Reconciliation Act of 2003, and the American Taxpayer Relief Act of 2012. Stock options have increased significantly as a share of compensation since 1992. I revisit results on the responsiveness of executives given this trend towards the use of options, and find a small short-run elasticity for executives, a larger short-run elasticity for CEOs specifically, and no long-run elasticity for either group.
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