We quantify the importance of imperfect competition in US labor market by estimating size rents earned American firms and workers. construct a matched employer-employee panel dataset combining universe business worker tax records for period 2001–2015. Using this data, we identify estimate an equilibrium model with two-sided heterogeneity where workers view as substitutes because heterogeneous p...

Despite the implications for policy, empirical evidence on relative importance of factors that shape labor supply responses is missing. This paper helps fill this gap and quantifies role information frictions versus other by combining notches in Norwegian welfare system quasi-experimental variation access to about slope location kinks. While we estimate a frictionless elasticity 0.3, overall at...

The value of stock-based compensation is typically taxed as ordinary income to the employee at vesting, but subsequent gains on the stock are capital gains. I examine whether it is ever optimal for an employee to accelerate the payment of ordinary income tax in order for subsequent gains to be taxed at the lower capital gains rate. The employee may accomplish this, for example, by exercising a ...

We consider the implications of ethical behaviour on the effect of a redistributive tax-transfer system. In choosing their labour supplies, individuals take into account whether their tax liabilities correspond to what they view as ethically acceptable. If tax liabilities are viewed as ethically acceptable, a taxpayer behaves ethically, does not distort her behaviour, and chooses to work as if ...

How Do Stamp Duties Affect the Housing Market? Land transfer taxes are a substantial portion of the cost of moving house in many developed countries. Since stamp duties are endogenous with respect to the house price, we create an instrumental variable that is the stamp duty on a property, given that postcode’s starting house price and the national house price trend. In a specification with post...

We present a non-cooperative model of a family’s time allocation between work and a home-produced public good, and examine whether the income tax should apply to couples or individuals. While tax-induced labor supply distortions lead to overprovision of the public good, spouses’ failure to internalize the collective effect of their choices points towards underprovision. A large parameter range ...

The objective of this paper is to empirically analyze the relationship between job flows and regional income stabilization provided by the national tax and transfer systems. The analysis is based on an administrative panel data set containing all sectors in 20 Swedish regions for the time period 1989-2000. Controlling for unobserved regional effects we find that a high net tax-income ratio tend...

Modelling Charitable Donations to an Unexpected Natural Disaster: Evidence from the U.S. Panel Study of Income Dynamics Using household-level data, we explore the relationship between donations to the victims of the 2004 Indian Ocean tsunami disaster and other charitable donations. The empirical evidence suggests that donations specifically for the victims of the tsunami are positively associat...

There is a strong case for arguing that, in contradiction to some traditional arguments in public economics, capital income should be taxed, though not necessarily under the same rate schedule as labour earnings. The Dual Income Taxation (DIT) system consists of two parallel piecewise linear tax schedules, in which that for capital income has a zero lower bracket rate and an upper bracket rate ...