Labor income responds differently to income-tax and payroll-tax reforms

Income Tax Buyouts and Income Tax Evasion

A tax buyout is a contract between tax authorities and a tax payer which reduces the marginal income tax rate in exchange for a lump-sum payment. While previous contributions have focussed on labour supply, we consider the interaction with tax evasion and show that a buyout can increase expected tax revenues. This will be the case if (1) the audit probability is constant and the penalty for eva...

income tax and labor supply

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Labor Market Responses to Payroll Tax Subsidies

In a high tax, high minimum wage labor market like France, payroll subsidies can reduce the minimum labor cost and expand employment opportunities for the low-skilled. Effects of these subsidies go beyond the directly affected. A particular concern is that high quality jobs may be replaced with lower quality ones, which hurts the employment opportunities of highly skilled workers and is costly ...

Negative Income Tax Plan

Analyzing tax reforms using the Swedish Labour Income Microsimulation Model

Labour income taxation is a central policy topic because labour income makes up the majority of national income and most taxes are in the end taxes on labour. In order to quantify how behavioural responses of labour income earners a ect tax revenue, the Swedish Labour Income Microsimulation Model (SLIMM) is constructed and used to evaluate tax reforms. The model simulates taxable income respons...