We examine the distributional consequences of the Unemployment Insurance (UI) payroll tax. Applying the ability-to-pay principle of equity, the UI payroll tax is quite regressive, while applying the benefits principle makes the UI program look quite good. We then simulate a revenue-neutral increase of the UI tax base to the OASDI tax base level, which appears equity-enhancing under the ability-to-pay principle, but has mixed effects under the benefits principle. Finally, providing family leave within the UI system would maintain the regressivity that violates the ability-to-pay principle of equity, but would agree much better with the benefits principle.
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Paper provided by Harris School of Public Policy Studies, University of Chicago in its series Working Papers with number
0601.
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Bound, John & Brown, Charles & Mathiowetz, Nancy, 2001.
"Measurement error in survey data,"
Handbook of Econometrics,
in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 59, pages 3705-3843
Elsevier.
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