Average Marginal Labor Income Tax Rates under the Affordable Care Act
AbstractThe Affordable Care Act includes four significant, permanent, implicit unemployment assistance programs, plus various implicit subsidies for underemployment, and expanded Medicaid eligibility for adults. Every sector of the economy, and about half of nonelderly adults, is directly affected by at least one of those provisions. This paper calculates the ACA’s impact on the average reward to working among nonelderly household heads and spouses. The law increases marginal tax rates by an average of five percentage points (of employee compensation), on top of the marginal tax rates that were already present before it went into effect. The ACA’s addition to labor tax wedges is roughly equivalent to doubling both employer and employee payroll tax rates for half of the population.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19365.
Date of creation: Aug 2013
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Find related papers by JEL classification:
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
- I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
This paper has been announced in the following NEP Reports:
- NEP-ACC-2013-09-28 (Accounting & Auditing)
- NEP-ALL-2013-09-28 (All new papers)
- NEP-HEA-2013-09-28 (Health Economics)
- NEP-LAB-2013-09-28 (Labour Economics)
- NEP-PBE-2013-09-28 (Public Economics)
- NEP-PUB-2013-09-28 (Public Finance)
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