How Big Should Government Be?
Suggests 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.
Volume (Year): 50 (1997)
Issue (Month): 2 (June)
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"The Transition Path in Privatizing Social Security,"
in: Privatizing Social Security, pages 215-264
National Bureau of Economic Research, Inc.
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