Excess Burden of Taxation
نویسندگان
چکیده
The excess burden of taxation is the efficiency cost, or deadweight loss, associated with taxation. Excess burden is commonly measured by the area of the associated Harberger triangle, though accurate measurement requires the use of compensated demand and supply schedules. The generation of empirical excess burden studies that followed Arnold Harberger’s pioneering work in the 1960s measured the costs of tax distortions to labor supply, saving, capital allocation, and other economic decisions. More recent work estimates excess burdens based on the effects of taxation on more comprehensive measures of taxable income, reporting sizable excess burdens of existing taxes. JEL Classifications: H21, D61. James R. Hines Jr. Department of Economics University of Michigan 343 Lorch Hall 611 Tappan Street Ann Arbor, MI 48109-1220
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