scholarly journals Intertemporal Labor Supply Substitution? Evidence from the Swiss Income Tax Holidays

2018 ◽  
Author(s):  
Isabel Martinez ◽  
Emmanuel Saez ◽  
Michael Siegenthaler
Keyword(s):  
Labor Supply ◽  
Income Tax ◽  
Tax Holidays

scholarly journals Intertemporal Labor Supply Substitution? Evidence from the Swiss Income Tax Holidays

2021 ◽  
Vol 111 (2) ◽  
pp. 506-546
Author(s):  
Isabel Z. Martínez ◽  
Emmanuel Saez ◽  
Michael Siegenthaler
Keyword(s):  
Labor Supply ◽  
Income Tax ◽  
Tax Avoidance ◽  
The Self ◽  
Extensive Margin ◽  
High Wage ◽  
Tax System ◽  
Swiss Cantons ◽  
Tax Holidays ◽  
Wage Earnings

This paper estimates intertemporal labor supply responses to two-year long income tax holidays staggered across Swiss cantons. Cantons shifted from an income tax system based on the previous two years’ income to a standard annual pay as you earn system, leaving two years of income untaxed. We find significant but quantitatively very small responses of wage earnings with an intertemporal elasticity of 0.025 overall. High wage income earners and especially the self-employed display larger responses with elasticities around 0.1 and 0.25, respectively, most likely driven by tax avoidance. We find no effects along the extensive margin at all. (JEL H24, H26, J22, J23, J31, R23)

The Labor-Supply Effects and Costs of Alternative Negative Income Tax Programs

1978 ◽  
Vol 13 (1) ◽  
pp. 3 ◽  
Author(s):  
Michael C. Keeley ◽  
Philip K. Robins ◽  
Robert G. Spiegelman ◽  
Richard W. West
Keyword(s):  
Labor Supply ◽  
Income Tax ◽  
Negative Income ◽  
Negative Income Tax

Forecasting the Effects of a Negative Income Tax Program

ILR Review ◽  
1982 ◽  
Vol 35 (2) ◽  
pp. 221-234 ◽  
Author(s):  
Terry R. Johnson ◽  
John H. Pencavel
Keyword(s):  
Labor Supply ◽  
Income Tax ◽  
Single Women ◽  
Married Women ◽  
Negative Income ◽  
Married Men ◽  
Supply Functions ◽  
Hours Of Work ◽  
The Hours ◽  
Negative Income Tax

This paper outlines a scheme that forecasts the change in net earnings or in hours worked that results from the introduction of a negative income tax (NIT) program. The authors illustrate this scheme by estimating labor supply functions for married men, married women, and single women who participated in the Seattle-Denver Income Maintenance Experiments. These functions are then used to simulate the effects of several NIT programs. The findings suggest that changes in the wage rate of an individual covered by an NIT program result in important changes in the hours of work of the individual's spouse.

scholarly journals Laffer Curves and Home Production

2017 ◽  
Vol 2017 (1) ◽  
pp. 59-69
Author(s):  
Mauri Kotamäki
Keyword(s):  
Labor Supply ◽  
Income Tax ◽  
Private Consumption ◽  
Home Production ◽  
Consumption Tax ◽  
Tax Base ◽  
Tax Rate ◽  
Related Literature ◽  
Laffer Curve ◽  
Laffer Curves

Abstract In the earlier related literature, consumption tax rate Laffer curve is found to be strictly increasing (see Trabandt and Uhlig (2011)). In this paper, a general equilibrium macro model is augmented by introducing a substitute for private consumption in the form of home production. The introduction of home production brings about an additional margin of adjustment – an increase in consumption tax rate not only decreases labor supply and reduces the consumption tax base but also allows a substitution of market goods with home-produced goods. The main objective of this paper is to show that, after the introduction of home production, the consumption tax Laffer curve exhibits an inverse U-shape. Also the income tax Laffer curves are significantly altered. The result shown in this paper casts doubt on some of the earlier results in the literature.

OPTIMAL TAXATION AND SOCIAL NETWORKS

2013 ◽  
Vol 18 (8) ◽  
pp. 1683-1712 ◽  
Author(s):  
Marcelo Arbex ◽  
Dennis O'Dea
Keyword(s):  
Social Network ◽  
Labor Supply ◽  
Job Search ◽  
Income Tax ◽  
Optimal Taxation ◽  
Social Activities ◽  
Employment Level ◽  
Tax Rate ◽  
Job Information ◽  
Capital Tax

We study optimal taxation when jobs are found through a social network. The network determines employment, which workers may influence by engaging in social activities. The network parameters play an important role in determining the economy's employment level and the optimal income tax. The optimal labor income tax depends on both the traditional intensive margin of labor supply and a new extensive margin that depends on the structure of the social network. Social activities that promote social connections are instrumental to acquiring job information; taxation thus discourages both social activities and labor supply, reducing employment. Labor taxes vary positively with labor supply and negatively with employment. When networking is absent, taxes are higher and the economy's employment rate is lower. The optimal capital tax rate is zero, independent of labor market frictions. Social networking reduces job search frictions and is welfare-enhancing.

scholarly journals On the (Ir)Relevance of Distribution and Labor Supply Distortion to Government Policy

2004 ◽  
Vol 18 (4) ◽  
pp. 159-175 ◽  
Author(s):  
Louis Kaplow
Keyword(s):  
Public Goods ◽  
Policy Analysis ◽  
Labor Supply ◽  
Income Tax ◽  
Government Policies ◽  
Labor Income ◽  
Budget Balance ◽  
Public Goods Provision ◽  
Aggregate Distribution ◽  
Labor Income Taxation

Should the assessment of government policies, such as the provision of public goods and the control of externalities, deviate from first-best principles to account for distributive effects and the distortionary cost of labor income taxation? For example, is the optimal extent of public goods provision smaller than indicated by the Samuelson rule because finance is distortionary? Or should environmental regulations fail to internalize externalities fully if the incidence of the regulations is regressive? It is suggested that these questions are best addressed by considering distribution-neutral implementation, in which budget balance is achieved by choosing an adjustment to the income tax that offsets the distributive impact of the policy in question. In basic cases, both distribution and labor supply distortion are moot because the target policy and the tax adjustment produce offsetting effects on each. Thus, traditional first-best principles provide good benchmarks for policy analysis after all. Moreover, even when actual implementation will not be distribution neutral in aggregate, distribution-neutral policy analysis has many conceptual and practical virtues that render it quite useful to investigators.

Sign in / Sign up

Export Citation Format

Share Document