Taxation and the Labor Supply: Decisions of the Affluent

78 Pages Posted: 24 Apr 1999 Last revised: 10 Feb 2023

See all articles by Robert A. Moffitt

Robert A. Moffitt

Johns Hopkins University - Department of Economics; National Bureau of Economic Research (NBER)

Mark Wilhelm

Indiana University Purdue University Indianapolis (IUPUI) - Department of Economics

Date Written: June 1998

Abstract

We examine the effect of the 1996 Tax Reform Act on the labor supply of affluent men. The Act reduced marginal tax rates for the affluent more than for other taxpayers. Using instrumental-variables methods with a variety of identifying variables, we find essentially no responsiveness of the hours of work of high-income men to the tax reduction. However, we do find hourly wage rates of such men to have increased over the period.

Suggested Citation

Moffitt, Robert and Wilhelm, Mark, Taxation and the Labor Supply: Decisions of the Affluent (June 1998). NBER Working Paper No. w6621, Available at SSRN: https://ssrn.com/abstract=160968

Robert Moffitt (Contact Author)

Johns Hopkins University - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Mark Wilhelm

Indiana University Purdue University Indianapolis (IUPUI) - Department of Economics ( email )

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Germany
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