全球智库信息集成服务系统(G2TT): Optimal Income Taxation with Unemployment and Wage Responses: A Sufficient Statistics Approach

G2TT

来源类型	Working Paper
规范类型	报告
DOI	10.3386/w21757
来源ID	Working Paper 21757
	Optimal Income Taxation with Unemployment and Wage Responses: A Sufficient Statistics Approach
	Kory Kroft; Kavan J. Kucko; Etienne Lehmann; Johannes F. Schmieder
发表日期	2015-11-30
出版年	2015
语种	英语
摘要	This paper reassesses whether the optimal income tax program features an Earned Income Tax Credit (EITC) or a Negative Income Tax (NIT) at the bottom of the income distribution, in the presence of unemployment and wage responses to taxation. The paper makes two key contributions. First, it derives a sufficient statistics optimal tax formula in a general model that incorporates unemployment and endogenous wages. This formula nests a broad variety of structures of the labor market, such as competitive models with fixed or flexible wages and models with matching frictions. Our results show that the sufficient statistics to be estimated are: the macro employment response with respect to taxation and the micro and macro participation responses with respect to taxation. We show that an EITC-like policy is optimal provided that the welfare weight on the working poor is larger than the ratio of the micro participation elasticity to the macro participation elasticity. The second contribution is to estimate the sufficient statistics that are inputs to the optimal tax formula using a standard quasi-experimental research design. We estimate these reduced-form parameters using policy variation in tax liabilities stemming from the U.S. tax and transfer system for over 20 years. Using our empirical estimates, we implement our sufficient statistics formula and show that the optimal tax at the bottom more closely resembles an NIT relative to the case where unemployment and wage responses are not taken into account.
主题	Public Economics ; Taxation ; Labor Economics ; Labor Supply and Demand
URL	https://www.nber.org/papers/w21757
来源智库	National Bureau of Economic Research (United States)
引用统计
资源类型	智库出版物
条目标识符	http://119.78.100.153/handle/2XGU8XDN/579430
推荐引用方式 GB/T 7714	Kory Kroft,Kavan J. Kucko,Etienne Lehmann,et al. Optimal Income Taxation with Unemployment and Wage Responses: A Sufficient Statistics Approach. 2015.