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Taxation and the Growth of Nonwage Compensation

Author

Listed:
  • Frank A. Sloan

    (Vanderbilt University)

  • Killard W. Adamache

    (Virginia Commonwealth University)

Abstract

Until recently, there have been no attempts to measure the influence of the income tax system on fringe benefits. A model is specified that links the tax system to fringe benefits. In addition, other determinants of the demand for and supply of fringe benefits are discussed. Using a time-series cross-section of establishment data, the influence of income taxes and other determinants on employer contributions to "voluntary" nonwage compensation is estimated. Using Tobit analysis, we find that higher marginal tax rates increase employer contributions to pensions and to life, accident, and health insurance. We also link our results to losses in federal tax revenues due to fringe benefits.

Suggested Citation

  • Frank A. Sloan & Killard W. Adamache, 1986. "Taxation and the Growth of Nonwage Compensation," Public Finance Review, , vol. 14(2), pages 115-137, April.
    • Handle: RePEc:sae:pubfin:v:14:y:1986:i:2:p:115-137
    DOI: 10.1177/109114218601400201
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    References listed on IDEAS

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    1. Burkhauser, Richard V & Warlick, Jennifer L, 1981. "Disentangling the Annuity from the Redistributive Aspects of Social Security in the United States," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 27(4), pages 401-421, December.
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    8. Richard V. Burkhauser & Jennifer L. Warlick, 1981. "Disentangling The Annuity From The Redistributive Aspects Of Social Security In The United States," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 27(4), pages 401-421, December.
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    Cited by:

    1. Douglas Holtz-Eakin, 1994. "Health Insurance Provision and Labor Market Efficiency in the United States and Germany," NBER Chapters, in: Social Protection versus Economic Flexibility: Is There a Trade-Off?, pages 157-188, National Bureau of Economic Research, Inc.
    2. Douglas Holtz-Eakin, "undated". "Job-Lock: An Impediment to Labor Mobility? Is Health Insurance Crippling the Labor Market?," Economics Public Policy Brief Archive 10, Levy Economics Institute.
    3. Don H. Chamberlain & L. Murphy Smith & Randall B. Bunker, 2016. "An examination of US state pensions by total state expenditures, state budget deficit and red v. blue state," International Journal of Economics and Accounting, Inderscience Enterprises Ltd, vol. 7(1), pages 27-44.
    4. Royalty, Anne Beeson, 2000. "Tax preferences for fringe benefits and workers' eligibility for employer health insurance," Journal of Public Economics, Elsevier, vol. 75(2), pages 209-227, February.

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