TY  - RPRT
        AU  - Bergolo, Marcelo
AU  - Burdin, Gabriel
AU  - Rosa, Mauricio De
AU  - Giaccobasso, Matias
AU  - Leites, Martin
        TI  - Tax Bunching at the Kink in the Presence of Low Capacity of Enforcement: Evidence from Uruguay
        PY  - 2019/Apr/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 12286
        UR  - https://www.iza.org/publications/dp12286
        AB  - By using a bunching design on rich administrative tax records from Uruguay's tax agency we explore how individual taxpayers respond to personal income taxation in a context with high sheltering opportunities. We estimate a moderated elasticity of taxable income in the first kink point (0.16) driven by a combination of gross labor income and deductions responses. Taxpayers use personal deductions more intensively close to the kink point and undereport income unilaterally or through employer-employee collusion. Our results suggest that policy efforts should be directed at broadening the tax base and improving the enforcement capacities rather than eroding tax progressivity.
        KW  - deductions behavior
KW  - elasticity of labor income
KW  - tax bunching
KW  - personal income taxation
KW  - misreporting
KW  - developing economies
        ER  -