Income and Payroll Tax Policy and Labor Supply

37 Pages Posted: 26 May 2004 Last revised: 3 Sep 2022

See all articles by Jerry A. Hausman

Jerry A. Hausman

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: December 1980

Abstract

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.

Suggested Citation

Hausman, Jerry A., Income and Payroll Tax Policy and Labor Supply (December 1980). NBER Working Paper No. w0610, Available at SSRN: https://ssrn.com/abstract=275368

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