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Do very high tax rates induce bunching? Implications for the Design of Income Contingent Loan Schemes

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dc.contributor.authorChapman, Bruce
dc.contributor.authorLeigh, Andrew
dc.date.accessioned2015-12-07T22:21:10Z
dc.date.issued2009
dc.date.updated2016-02-24T10:53:55Z
dc.description.abstractUnder the Higher Education Contribution Scheme graduates face a sharp discontinuity in their taxable incomes. At the first repayment threshold, they are required to pay a percentage of their entire income to reduce their debts. This results in an extremely high effective marginal tax rate. Using a sample of taxpayer returns we investigate whether taxpayers bunch below the repayment threshold. We find a statistically significant degree of bunching below the threshold, but the effect is economically small. The result has important implications for the design of income contingent university loan schemes.en_AU
dc.identifier.issn0013-0249
dc.identifier.urihttp://hdl.handle.net/1885/19915en_AU
dc.publisherBlackwell Publishing Ltd
dc.sourceThe Economic Record
dc.subjectKeywords: contingent valuation; credit provision; debt; design; higher education; income distribution; tax incentive; tax system; university sector
dc.titleDo very high tax rates induce bunching? Implications for the Design of Income Contingent Loan Schemes
dc.typeJournal article
local.bibliographicCitation.issue270
local.bibliographicCitation.lastpage289
local.bibliographicCitation.startpage276
local.contributor.affiliationChapman, Bruce, College of Asia and the Pacific, ANU
local.contributor.affiliationLeigh, Andrew, College of Business and Economics, ANU
local.contributor.authoruidChapman, Bruce, u8701423
local.contributor.authoruidLeigh, Andrew, u4170357
local.description.embargo2037-12-31
local.description.notesImported from ARIES
local.identifier.absfor140207 - Financial Economics
local.identifier.ariespublicationu4303234xPUB10
local.identifier.citationvolume85
local.identifier.doi10.1111/j.1475-4932.2009.00554.x
local.identifier.scopusID2-s2.0-68749086069
local.identifier.thomsonID000268791000003
local.type.statusPublished Version

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