How Big Should Government Be?
AbstractSuggests that the deadweight burden caused by a tax rate increase depends not only on labor force participation response but also on other dimensions of labor supply (the forms in which compensation is paid; the forms of tax-favored consumption; and intertemporal allocation of consumption.) Recent econometric work implies that the deadweight burden caused by incremental taxation (the marginal excess burden) may exceed one dollar per dollar of revenue raised, making the cost of incremental government spending more than two dollars for each dollar of government spending.
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Bibliographic InfoPaper provided by Harvard University Department of Economics in its series Scholarly Articles with number 3043427.
Date of creation: 1997
Date of revision:
Publication status: Published in National tax journal
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