Concerns over rising income inequality have led several countries to implement taxes on high wages. Using comprehensive linked employer-employee data, individual income tax returns, and firm-level records, we study the incidence of the introduction of a 16% surtax on wages exceeding €150,000 in 2012 and 2013 in the Netherlands. We find evidence of significant bunching just below the €150,000 threshold, primarily among owner-managers across all industries, but especially so in legal services and tax consultancy. This bunching persists even after the surtax repeal. Exploiting the granular nature of the linked employer-employee data, we are able to rule out intertemporal income shifting as an important mechanism.
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CBT seminars are open to Oxford University students, faculty and staff.
Registration will close at Midday on Friday 28 February.
You can register to attendby contacting cbtevents@sbs.ox.ac.uk. A calendar invite confirming your registration will be sent by 4pm on Friday 28 February.
