Taxation of Capital and Labor:The Diverse Landscape by Entity Type
This paper derives standardized measures of labor and capital income that account for the different reporting requirements and incentives faced by different forms of organization. This facilitates estimating how much capital income is subject to employment taxes and how much labor income escapes employment taxes (specifically, those levied under the Federal Insurance Contribution Act (FICA) and Self–Employment Contributions Act (SECA)). The paper also shows an additional reason why economic incidence of taxes is different from statutory incidence, namely that different entity types are taxed on their labor and capital income in different ways, have different reporting requirements and, therefore, have differing incentives for taxpayers to mischaracterize their income with the intention of reducing liability. Ultimately, tax filing requirements cause some capital income of sole proprietors and general partners to be subject to employment taxes as if it were labor income. Furthermore, taxpayer behavior causes some labor income of limited partners and shareholders of S and privately held C corporations to escape employment taxes.
Volume (Year): 61 (2008)
Issue (Month): 3 (September)
|Contact details of provider:|| Postal: 529 14th Street NW Suite 750, Washington DC 20045|
Web page: https://www.ntanet.org/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ntj:journl:v:61:y:2008:i:3:p:397-419. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ann Crampton)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.