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The incidence of Payroll Taxes in Ontario and Quebec; Evidence from collective agreements for 1985-2007

Author

Listed:
  • Edison Roy César
  • François Vaillancourt

Abstract

This study uses an original data set, combining information for all collective agreements covering more than 500 employees signed in Quebec or Ontario from 1985 to 2007 and information on payroll taxes and other variables, to measure the incidence of an increase in payroll tax. The results of this model show that that after one year, a one percentage point increase in the general payroll tax reduces wages growth by 1/2 of a percentage point in Quebec and 3/10 of a point in Ontario. Cette étude utilise une base de données originale regroupant les conventions collectives couvrant plus de 500 employés signées au Québec ou en Ontario de 1985 `à 2007 et des informations sur les taxes sur la masse salariale et d'autres variables, afin de mesurer l'effet d'une augmentation de taxe sur la masse salariale. Les résultats de ce modèle indiquent qu'après un an, une augmentation d'un point de pourcentage des taxes générales sur la masse salariale fait diminuer la croissance des salaires de 1/2 point de pourcentage au Québec et 3/10 de point de pourcentage en Ontario.

Suggested Citation

  • Edison Roy César & François Vaillancourt, 2010. "The incidence of Payroll Taxes in Ontario and Quebec; Evidence from collective agreements for 1985-2007," CIRANO Working Papers 2010s-36, CIRANO.
    • Handle: RePEc:cir:cirwor:2010s-36
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    File URL: https://cirano.qc.ca/files/publications/2010s-36.pdf
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Why would we assume that high earners are price takers in the labour market?
      by Stephen Gordon in Worthwhile Canadian Initiative on 2010-10-11 17:50:13

    Citations

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    Cited by:

    1. Julien Martin & Florian Mayneris, 2022. "Revue de littérature sur l’incidence fiscale des taxes sur les entreprises," CIRANO Project Reports 2022rp-06, CIRANO.
    2. David Boisclair & Jean-Yves Duclos & Steeve Marchand & Pierre-Carl Michaud, 2014. "An Economic Analysis of Proposals to Improve Coverage of Longevity Risk," Cahiers de recherche 1406, Chaire de recherche Industrielle Alliance sur les enjeux économiques des changements démographiques.
    3. Paul Mortimer-Lee, 2021. "The New Employment Tax," National Institute of Economic and Social Research (NIESR) Policy Papers 30, National Institute of Economic and Social Research.
    4. Jonathan Deslauriers & Benoit Dostie & Robert Gagné & Jonathan Paré, 2021. "Estimating the impacts of payroll taxes: Evidence from Canadian employer–employee tax data," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 54(4), pages 1609-1637, November.

    More about this item

    Keywords

    Payroll taxes; incidence; collective agreements; wages; Taxe sur la masse salariale; incidence; conventions collectives; salaires;
    All these keywords.

    JEL classification:

    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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