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Teaching Note: Let's Stop Professing That the Legal Incidence of the Social Security Tax Is Irrelevant


  • James E. McClure

    () (Department of Economics, Ball State University)

  • T. Norman Van Cott

    (Ball State University)


The U.S. Social Security levy is widely used by economists to illustrate the irrelevance of legal tax incidence for economic incidence. However, the levy's magnitude in conjunction with an asymmetry in the U.S. federal income tax code make the levy's legal incidence highly relevant for its economic incidence. The legal incidence of the social security levy is irrelevant only to workers who are disinterested in large variations in take-home pay.

Suggested Citation

  • James E. McClure & T. Norman Van Cott, 2000. "Teaching Note: Let's Stop Professing That the Legal Incidence of the Social Security Tax Is Irrelevant," Eastern Economic Journal, Eastern Economic Association, vol. 26(4), pages 483-486, Fall.
  • Handle: RePEc:eej:eeconj:v:26:y:2000:i:4:p:483-486

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    Incidence; Income Tax; Social Security; Tax Incidence; Tax;

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence


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