The Effect of Income Taxation on Labor Supply when Deductions Are Endogenous
AbstractThis paper extends the standard static model of labor supply and taxation to the case where people are able to legally avoid taxes through the use of itemized deductions. Tax deductible expenditures are treated as a Hicksian composite good with a price (for those who decide to itemize) proportional to one minus the marginal tax rate. Estimation of the commonly used linear labor supply model (extended to incorporate the additional composite good) on a cross-section of prime aged married men suggests that tax deductible consumption is an uncompensated substitute for leisure (and complement with labor). The impact of taxes through the relative price of deductible expenditures appears to be much stronger than through the net wage. Copyright 1992 by MIT Press.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by MIT Press in its journal Review of Economics & Statistics.
Volume (Year): 74 (1992)
Issue (Month): 1 (February)
Contact details of provider:
Web page: http://mitpress.mit.edu/journals/
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Agell, Jonas & Persson, Mats & Sacklén, Hans, 1999.
"Labour Supply Prediction When Tax Avoidance Matters,"
679, Stockholm University, Institute for International Economic Studies.
- Agell, J. & Persson, M. and Sacklen, H., 1999. "Labor Supply Prediction when Tax Avoidance Matters," Papers 1999:16, Uppsala - Working Paper Series.
- Agell, Jonas & Persson, Mats & Sacklén, Hans, 1999. "Labor Supply Prediction when Tax Avoidance Matters," Working Paper Series 1999:16, Uppsala University, Department of Economics.
- Agell, Jonas & Persson, Mats & Sacklén, Hans, 1999. "Labor Supply When Tax Avoidance Matters," Working Paper Series 157, Trade Union Institute for Economic Research.
- Martin Feldstein, 1999.
"Tax Avoidance And The Deadweight Loss Of The Income Tax,"
The Review of Economics and Statistics,
MIT Press, vol. 81(4), pages 674-680, November.
- Martin Feldstein, 1995. "Tax Avoidance and the Deadweight Loss of the Income Tax," NBER Working Papers 5055, National Bureau of Economic Research, Inc.
- Carlin, Paul S. & Flood, Lennart, 1997. "Do children affect the labor supply of Swedish men? Time diary vs. survey data," Labour Economics, Elsevier, vol. 4(2), pages 167-183, June.
- Agell, Jonas & Persson, Mats, 1998.
"Tax Arbitrage and Labor Supply,"
647, Stockholm University, Institute for International Economic Studies.
- Jonas Agell & Mats Persson, 1998. "Tax Arbitrage and Labor Supply," NBER Working Papers 6708, National Bureau of Economic Research, Inc.
- Agell, J. & Persson, M., 1998. "Tax Arbitrage and Labour Supply," Papers 647, Stockholm - International Economic Studies.
- Agell, J. & Presson, M., 1997. "Tax Arbitarge and Labor Supply," Papers 1997-26, Uppsala - Working Paper Series.
- Agell, Jonas & Persson, Mats, 1997. "Tax Arbitrage and Labor Supply," Working Paper Series 1997:26, Uppsala University, Department of Economics.
- Anil Kumar, 2012.
"Nonparametric estimation of the impact of taxes on female labor supply,"
Journal of Applied Econometrics,
John Wiley & Sons, Ltd., vol. 27(3), pages 415-439, 04.
- Anil Kumar, 2005. "Nonparametric estimation of the impact of taxes on female labor supply," Working Papers 0505, Federal Reserve Bank of Dallas.
- Showalter, Mark H. & Thurston, Norman K., 1997. "Taxes and labor supply of high-income physicians," Journal of Public Economics, Elsevier, vol. 66(1), pages 73-97, October.
- Agell, Jonas & Persson, Mats & Sacklen, Hans, 2004. "The effects of tax reform on labor supply, tax revenue and welfare when tax avoidance matters," European Journal of Political Economy, Elsevier, vol. 20(4), pages 963-982, November.
- Kumar, Anil, 2008. "Labor supply, deadweight loss and tax reform act of 1986: A nonparametric evaluation using panel data," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 236-253, February.
- Triest, Robert K., 1998. "Econometric Issues in Estimating the Behavioral Response to Taxation: A Nontechnical Introduction," National Tax Journal, National Tax Association, vol. 51(n. 4), pages 761-72, December.
- Robert Gagné & Jean-François Nadeau & François Vaillancourt, 2000. "Taxpayers' Response to Tax Rate Changes: A Canadian Panel Study," CIRANO Working Papers 2000s-59, CIRANO.
- Atallah, Gamal, 1998. "Les impôts sur le revenu et l’offre de travail des femmes mariées : une revue de la littérature," L'Actualité Economique, Société Canadienne de Science Economique, vol. 74(1), pages 95-128, mars.
- Adriana Kugler, 2011. "Is there an Anti-labor Bias of Taxes? A Survey of the Evidence from Latin America and Around the World," Research Department Publications 4746, Inter-American Development Bank, Research Department.
- Robert A Moffitt & Mark Wilhelm, 2000.
"Taxation and the Labor Supply - Decisions of the Affluent,"
Economics Working Paper Archive
414, The Johns Hopkins University,Department of Economics.
- Robert A. Moffitt & Mark Wilhelm, 1998. "Taxation and the Labor Supply: Decisions of the Affluent," NBER Working Papers 6621, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Karie Kirkpatrick).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.