I define a new tax instrument, the 'deductibility rate,' which specifies the proportion of eligible expenses a taxpayer may deduct when preparing her taxes. If the utilities of gross income and deductions are separable, then the deduction elasticity reflects the revenue leakage caused by greater...

I define a new tax instrument, the ‘deductibility rate', which specifies the proportion of eligible expenses a taxpayer may deduct when preparing her taxes. If the utilities of gross income and deductions are separable, then the deduction elasticity reflects the revenue leakage caused by...

During the COVID-19 pandemic, the Australian government allowed eligible individuals to withdraw up to A$20,000 (around half median annual wage income) across two tranches from their retirement accounts, ordinarily inaccessible until retirement. Based on historical returns, the modal withdrawal...

Australian taxpayers display reference-dependent preferences when filing their tax returns - theybunch at positive and salient thresholds. We develop a model of taxpayer behavior to show thatbunching heterogeneity reflects both differences in preferences and the rate at which the marginalcost of...