Efficiency effects of tax deductions for work-related expenses
AbstractThis paper studies the efficiency effects of granting deductions for work-related expenses. It is shown that much depends on whether the expenses are required for increasing taxable income and on whether the expenses are social costs. Among the noteworthy results are the following. Expenses for commuting should be taxed rather than granted deduction, as the increasing effect of commuting on taxable income is doubtful. Deductions for private costs such as expenses for housework and child care may turn out to be allocationally neutral. If they are not neutral, however, the efficient degree of deduction depends on relative labor supply elasticities. Copyright Springer Science + Business Media, LLC 2006
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Bibliographic InfoArticle provided by Springer in its journal International Tax and Public Finance.
Volume (Year): 13 (2006)
Issue (Month): 6 (November)
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Web page: http://www.springerlink.com/link.asp?id=102915
Income tax deductions; Commuting; Housework; Child care; Educational expenses; Efficient taxation; Production efficiency;
Other versions of this item:
- Wolfram F. Richter, 2004. "Efficiency Effects of Tax Deductions for Work-Related Expenses," CESifo Working Paper Series 1311, CESifo Group Munich.
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