New Study Reveals Impact of Tax Policy Changes on Income Elasticity
The article looks at how people's income changes in response to tax policies. By analyzing tax data from 1979 to 2001, the researchers found that income sensitivity to taxes was lower in the 1990s compared to the 1980s. Adding demographic info didn't affect income sensitivity much in the 1980s, but lowered it in the 1990s, especially for broader income measures. Weighting results by income showed that a small number of high-income individuals had a big impact on the estimates. Removing just 0.2% of the sample lowered the estimated income sensitivity in the 1980s significantly.