Income and Payroll Tax Policy and Labor Supply
This paper considers both theoretical quest ions and empirical measures of the effects of various policies of income and payroll taxation on labor supply. It emphasizes deadweight loss as the correct criterion of taxation evaluation, rather than merely output effects. Distributional issues are also discussed. Simulations are done for the Kemp-Roth tax reform proposals to calculate both revenue effects and changes in deadweight loss. Deadweight loss calculations are also done for an equal yield progressive linear income tax.
|Date of creation:||Dec 1980|
|Date of revision:|
|Publication status:||published as Hausman, Jerry A. "Income and Payroll Tax Policy and Labor Supply." The Supply Side Effects of Economic Policy, edited by L. Mayer. St. Louis: Centerfor the Study of American Business, 1981.|
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- R. E. Hall, 1970. "Wages, Income and Hours of Work in the U. S. Labor Force," Working papers 62, Massachusetts Institute of Technology (MIT), Department of Economics.
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- Atkinson, A. B. & Stiglitz, J. E., 1976. "The design of tax structure: Direct versus indirect taxation," Journal of Public Economics, Elsevier, vol. 6(1-2), pages 55-75.
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