Some Empirical Evidence on Taxpayer Rationality.

Key Points

• The research aims to investigate how quickly and accurately taxpayers respond to changes in income tax laws.
• Utilized a multiple time series model to analyze taxpayer behavior.
• Examined both individual and corporate taxpayer reactions to tax law changes.
• Focused on income tax prepayments as a measure of response.
• Individuals and corporations adjust their income tax prepayments quickly after a tax increase.
• The adjustments are relatively accurate to the changes in tax law.