Hans Schytte Sigaard, Aarhus University

This paper estimates an empirical model consistent with a collective household model to identify intrahousehold responses in taxable income to tax reforms, accounting for spousal spillover effects. Using rich administrative data and a tax reform that led to substantial tax cuts for a broad set of taxpayers, my preliminary results first confirm standard findings in the elasticity of taxable income literature, that both men and women increase taxable income in response to tax cuts. However, the standard estimation approach masks significant gender asymmetries in responses. Although women are unresponsive to their partner's tax cut, men significantly increase their taxable income in response to their partner's tax cuts. Intrahousehold responses are important to account for when evaluating the welfare implications of tax reforms.