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Effects of Taxes on Economic Behavior

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  • Martin S. Feldstein

Abstract

This paper discusses how the effects of taxes on economic behavior are important for revenue estimation, for calculating efficiency effects, and for understanding short-term macroeconomoic consequences. The primary focus is on taxes on labor income but some attention is given to taxes on income from saving. Specific calculations illustrate the importance of behavioral responses for accurate calculation of the revenue effects and deadweight losses of tax changes.

Suggested Citation

  • Martin S. Feldstein, 2008. "Effects of Taxes on Economic Behavior," NBER Working Papers 13745, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:13745
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    File URL: http://www.nber.org/papers/w13745.pdf
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    References listed on IDEAS

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    1. Gruber, Jon & Saez, Emmanuel, 2002. "The elasticity of taxable income: evidence and implications," Journal of Public Economics, Elsevier, vol. 84(1), pages 1-32, April.
    2. Mikhail Golosov & Aleh Tsyvinski, 2007. "Optimal Taxation with Endogenous Insurance Markets," The Quarterly Journal of Economics, Oxford University Press, vol. 122(2), pages 487-534.
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    Cited by:

    1. José P. Dapena & Mario Volman, 2014. "Distorsiones económicas y financieras originadas en el impuesto sobre los ingresos brutos," CEMA Working Papers: Serie Documentos de Trabajo. 542, Universidad del CEMA.
    2. Erdős, Tibor, 2014. "Az adózás, a hatékonyság és a gazdasági növekedés kapcsolatának néhány elméleti problémája
      [Some Theoretical Problems with the Relation between Taxation, Efficiency and Economic Growth]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(S6), pages 1-76.
    3. Tomasz Skica & Tomasz Wo³owiec & Pavel Pavlov, 2014. "Eeconomic Relations Between Personal And Corporate Income Tax," "e-Finanse", University of Information Technology and Management, Institute of Financial Research and Analysis, vol. 10(1), pages 60-68, June.
    4. Nisha Arunatilake & Priyanka Jayawardena & Anushka Wijesinha, 2012. "Tax Reforms in Sri Lanka: will a Tax on Public Servants Improve Progressivity?," Working Papers PMMA 2012-13, PEP-PMMA.
    5. Michaud, Pierre-Carl & Goldman, Dana P. & Lakdawalla, Darius N. & Zheng, Yuhui & Gailey, Adam H., 2012. "The value of medical and pharmaceutical interventions for reducing obesity," Journal of Health Economics, Elsevier, vol. 31(4), pages 630-643.
    6. Forni, Lorenzo & Gerali, Andrea & Pisani, Massimiliano, 2010. "The macroeconomics of fiscal consolidations in euro area countries," Journal of Economic Dynamics and Control, Elsevier, vol. 34(9), pages 1791-1812, September.
    7. José Félix Sanz-Sanz & María Arrazola-Vacas & Nuria Rueda-López & Desiderio Romero-Jordán, 2015. "Reported gross income and marginal tax rates: estimation of the behavioural reactions of Spanish taxpayers," Applied Economics, Taylor & Francis Journals, vol. 47(5), pages 466-484, January.
    8. T. Nicolaus Tideman & Florenz Plassmann, 2015. "Sources of Public Revenue that Make Nations Richer," Economic Affairs, Wiley Blackwell, vol. 35(2), pages 197-214, June.
    9. Ioannis N. Kallianiotis, 2015. "The Optimal Taxation and the Current Tax System," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 3(3), pages 151-164, March.
    10. José P. Dapena & Gabriel Sosa, 2016. "Efecto y distorsiones de los impuestos en los incentivos a la inversión y en los precios: Comparación Argentina - Estados Unidos," CEMA Working Papers: Serie Documentos de Trabajo. 588, Universidad del CEMA.
    11. Hammar, Henrik & Sjöström, Magnus, 2011. "Accounting for behavioral effects of increases in the carbon dioxide (CO2) tax in revenue estimation in Sweden," Energy Policy, Elsevier, vol. 39(10), pages 6672-6676, October.

    More about this item

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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