IESET.
Hypotheses·distribution·tax_inequality_canada_2016_top_rate_increase

The 2016 Trudeau federal top marginal income tax bracket (33 percent on income above CAD 200,000, raising combined federal-provincial top rate to 53.5 percent in Ontario) produced a measurable but transitory forestalling spike in reported top-1 pretax income share in 2015 with partial reversion by 2018, consistent with a Canadian ETI estimate in the 0.4-0.7 range as documented by Milligan-Smart.

The discriminating test is the 2015 forestalling magnitude and the 2018 reversion.

PARTIALengine/runs/tax_inequality_canada_2016_top_rate_increase

PARTIAL — shape=ITS, mean_gap=+0.3233, z=+0.69; claim direction ambiguous

confidence cueThe result is useful, but not decisive. Treat it as a clue, not a settled conclusion.

policy briefMixed or noisy

In ordinary language

Over a long period, do more market-oriented institutions translate into higher income or productivity, once the comparison looks beyond a single success story?

plain answer

The evidence is suggestive but not decisive. shape=ITS, mean_gap=+0.3233, z=+0.69; claim direction ambiguous

why it matters

Distributional claims often sound morally clear but are empirically complex. This test asks whether the proposed channel explains real differences across places.

how the test works

It compares 1 country or place units from 2005 to 2020, using a event study design, with fixed effects for year.

what was measured
What changed
  • Forestalling 2015 indicator
  • Trudeau top rate post 2016
What we checked
  • Top 1pct pretax income share
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/tax_inequality_canada_2016_top_rate_increase
1007550250200520132020CAN
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show top_1pct_pretax_income_share across 1 sampled countries over 2005–2020.
The shapes above are stylised — none of the lines are real data.
Placeholder for tax_inequality_canada_2016_top_rate_increase. Published chart will be generated from engine/runs/tax_inequality_canada_2016_top_rate_increase/chart_data.json.

Pre-registration

pre-registered
first-spec commit 098ce96 · 2026-04-30T12:57:33Z
run generated · 2026-04-30T12:29:39Z

The 2016 Trudeau federal top marginal income tax bracket (33 percent on income above CAD 200,000, raising combined federal-provincial top rate to 53.5 percent in Ontario) produced a measurable but transitory forestalling spike in reported top-1 pretax income share in 2015 with partial reversion by 2018, consistent with a Canadian ETI estimate in the 0.4-0.7 range as documented by Milligan-Smart. The discriminating test is the 2015 forestalling magnitude and the 2018 reversion.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

SUPPORTED if Canadian top-1 share shows 2015 forestalling spike of at least 0.5 percentage points AND post-2017 share is within 0.5pp of the 2010-2014 baseline at p<0.10. REFUTED if forestalling spike is below 0.2 pp or post-2017 share is more than 1.0 pp below baseline.

formal test & threshold
test:      Canada time-series + provincial cross-section structural break at 2016Q1 with 2015 forestalling dummy.

Method

Template
event_study
Fixed effects
year
Clustering
year
Sample
1 countries · 2005 – 2020
Evidence type
associational

Event study with break at 2016Q1 and 2015 forestalling dummy. HAC SEs.

Data

VariableSourceTransform
top_1pct_pretax_income_share
outcome
owid:top-1-share-of-total-incometier 2
level
forestalling_2015_indicator
treatment
constructed:indicator = 1 for year == 2015tier 5
indicator
trudeau_top_rate_post_2016
treatment
constructed:indicator = 1 for year >= 2016tier 5
indicator
top_marginal_income_tax_rate
treatment
owid:top-marginal-income-tax-ratetier 2
level
log_real_gdp
control
world_bank_wdi:NY.GDP.MKTP.KDtier 2
log
equity_index_real_yoy
control
fred:SP500tier 1
real_yoy_pct_change

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — tax_inequality_canada_2016_top_rate_increase

Verdict: PARTIAL — shape=ITS, mean_gap=+0.3233, z=+0.69; claim direction ambiguous

Pre-registration

  • Claim: The 2016 Trudeau federal top marginal income tax bracket (33 percent on income above CAD 200,000, raising combined federal-provincial top rate to 53.5 percent in Ontario) produced a measurable but transitory forestalling spike in reported top-1 pretax income share in 2015 with partial reversion by 2018, consistent with a Canadian ETI estimate in the 0.4-0.7 range as documented by Milligan-Smart. The discriminating test is the 2015 forestalling magnitude and the 2018 reversion.
  • Falsification rule: SUPPORTED if Canadian top-1 share shows 2015 forestalling spike of at least 0.5 percentage points AND post-2017 share is within 0.5pp of the 2010-2014 baseline at p<0.10. REFUTED if forestalling spike is below 0.2 pp or post-2017 share is more than 1.0 pp below baseline.
  • Falsification test: Canada time-series + provincial cross-section structural break at 2016Q1 with 2015 forestalling dummy.
  • Event year: 2016

Estimate

  • shape: single_country_its
  • country: CAN
  • event_year: 2016
  • n_pre: 11
  • n_post: 5
  • pre_trend_slope: -0.31645454545455326
  • pre_trend_intercept: 648.6700000000156
  • pre_residual_sd: 0.46607636908362343
  • end_year: 2020
  • end_year_actual: 10.59
  • end_year_counterfactual: 9.431818181818016
  • end_year_gap: 1.1581818181819834
  • mean_post_gap: 0.3232727272728315
  • z_end: 2.4849614677078433
  • z_mean: 0.6936046294482481
  • post_period_years: [2016, 2020]

Variables resolved

  • owid:top-1-share-of-total-income → top_1pct_pretax_income_share (outcome, publisher=owid, n=3294)
  • owid:top-marginal-income-tax-rate → top_marginal_income_tax_rate (treatment, publisher=owid, n=590)
  • world_bank_wdi:NY.GDP.MKTP.KD → log_real_gdp (controls, publisher=world_bank_wdi, n=14066)
  • fred:SP500 → equity_index_real_yoy (controls, publisher=fred, n=11)

Variables missing data

  • constructed: indicator = 1 for year == 2015 (treatment, name=forestalling_2015_indicator)
  • constructed: indicator = 1 for year >= 2016 (treatment, name=trudeau_top_rate_post_2016)

Generated by scripts/run_event_study.py at 2026-04-30T12:29:39+00:00

Notes

Tax-inequality candidate, swarm-S6 batch 4.

Authored framework. Read the transparency note.