Social Sciences
4 years ago

Barbados Tax Cuts Lead to Decrease in Taxable Income, Especially for Women.

RePEc: Research Papers in Economics
The Responsiveness of Taxable Income to Changes in Marginal Tax Rates in Barbados
Winston Moore

Paper Summary

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Tax reforms in Barbados have led to changes in income tax rates, affecting how much people report as taxable income. A study of 3,000 taxpayers from 2003 to 2006 found that when marginal tax rates go up by 1 percent, taxable income goes down by 0.2 percent. Low-income taxpayers are more sensitive to these changes, with their taxable income decreasing by 0.9 percent. Additionally, females are more responsive to changes in tax rates compared to males.