Abstract This study examines the effect of an income tax reform on wages. An Israeli reform implemented in 2003–2009 reduced individuals’ marginal income tax rate by 7–17 percentage points. We utilized the differential and non-monotonic marginal tax rate reduction, and used Israel Tax Authority panel data of wage earners, merged with Labor Force Surveys. We found that in the business sector, the elasticity of reported gross wages relative to the net-of-tax rate is about 0.1. The wage earners in the lowest wage quintile were not affected by the tax reform, those in the second and third quintiles did not respond to the tax cut, but elasticity increased with wage, reaching about 0.4 in the upper decile. We did not find statistically significant differences in elasticity by gender, ethnicity, or education.

中文翻译：

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工资对降低所得税率的反应：以色列税收改革

摘要 本研究考察了所得税改革对工资的影响。以色列在 2003-2009 年实施的一项改革将个人的边际所得税率降低了 7-17 个百分点。我们利用差异和非单调边际税率降低，并使用以色列税务局工薪阶层面板数据，并与劳动力调查合并。我们发现，在商业部门，报告的总工资相对于税后税率的弹性约为 0.1。工资最低的五分之一的工薪阶层不受税制改革的影响，二、三等分的工薪阶层对减税没有反应，但弹性随着工资的增加而增加，在上等位数达到0.4左右。我们没有发现不同性别、种族或教育的弹性在统计学上有显着差异。