Asymmetric responses to income changes: The payroll tax increase versus tax refund in 2013

Anat Bracha, Daniel Cooper*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

8 Scopus citations

Abstract

We examine low-to-middle incomeindividuals' responses to the 2013 payroll tax increase and their 2012 tax refund and find that consumption declines 90 cents per dollar lost to the tax increase, and rises 60 cents per additional tax refund dollar.

Original languageAmerican English
Pages (from-to)534-538
Number of pages5
JournalEconomics Letters
Volume124
Issue number3
DOIs
StatePublished - Sep 2014
Externally publishedYes

Keywords

  • Consumption
  • Payroll tax changes
  • Saving
  • Tax refunds

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