Pension Saving Responses to Anticipated Tax Changes: Evidence From Monthly Pension Contribution Records
Pension Saving Responses to Anticipated Tax Changes: Evidence From Monthly Pension Contribution Records
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Date
2016-10-01
Authors
Skov, P
Kreiner, CTK
Leth-Petersen, SLP
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Auckland University of Technology (AUT)
Abstract
A Danish tax reform, decided in May 2009 and taking effect from the beginning of 2010, lowered the marginal tax rate on top bracket taxable income from 63% to 56%. Because contributions to pension accounts are tax deductible, the reform provided an incentive to increase pension contributions before the change in taxation. Using high frequency panel data, we document an increase in pension contributions in the second half of 2009 in response to the anticipated change in taxation, and that this led to an increase in total savings.
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Keywords
Pension savings; Tax incentives; High frequency individual data
Source
Paper provided by Auckland University of Technology. School of Economics in its series School of Economics Working Paper Series with number 2016/06.
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