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# Do Taxpayers Bunch at Kink Points?

## Details

**Authors** Emmanuel Saez

**Year** 2010

**Publisher** American Economic Journal: Economic Policy

**Kind of work** article

**Discipline** Economics

**Secondary disciplines** Public Policy

**Applied** false

[Read it at the publisher](https://doi.org/10.1257/pol.2.3.180) 
10.1257/pol.2.3.180

## In authors' words

### Abstract

This paper uses tax return data to analyze bunching at the kink points of the US income tax schedule. We estimate the compensated elasticity of reported income with respect to (one minus) the marginal tax rate using bunching evidence. We find clear evidence of bunching around the first kink point of the Earned Income Tax Credit but concentrated solely among the self-employed. A simple tax evasion model can account for those results. We find evidence of bunching at the threshold of the first income tax bracket where tax liability starts but no evidence of bunching at any other kink point.

### What they set out to do (purpose)

To test whether reported income clusters at the statutory kink points of the U.S. income tax schedule.

### Who or what was studied (sample)

U.S. individual income tax return microdata from the IRS Statistics of Income.

### How they did it (methods)

Nonparametric analysis of the density of reported income around each schedule kink point, compared against a smooth counterfactual distribution.

### What they found (results)

Sharp excess bunching appears at the Earned Income Tax Credit's first kink point, concentrated only among the self-employed, and at the threshold where income tax liability begins, but not at any other kink point in the schedule.

## Commentary

### In short

The finding turns on a Distinction: a single categorical boundary in a tax schedule reorganizes the distribution of a continuous quantity around itself, but only for the subgroup able to act on the boundary.

**Patterns it shows** D

**Added** 2026-09-26

**How to cite this** Emmanuel Saez (2010). Do Taxpayers Bunch at Kink Points?. American Economic Journal: Economic Policy.