Tax Arbitrage and Labor Supply / Jonas Agell, Mats Persson.

Format:

Book

Author/Creator:

Agell, Jonas.

Contributor:

National Bureau of Economic Research.

Persson, Mats.

Series:

Working Paper Series (National Bureau of Economic Research) no. w6708.

NBER working paper series no. w6708

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1998.

Summary:

We examine how tax avoidance in the form of trade in well-functioning asset markets affects the basic labor supply model. We argue that models that integrate tax arbitrage and labor supply decisions may shed light on a number of positive and normative questions concerning modern systems of income taxation. Such models also appear to have strong implications for empirical research. Studies that ignore the effects of tax arbitrage and asset trade on labor supply incentives may easily come up with biased estimates of the tax responsiveness of the hours supply of high-wage individuals. Finally, because of tax avoidance in the form of asset trade, international comparisons of income inequality will exaggerate the redistributive achievements of high-tax countries like Sweden.

Notes:

Print version record

August 1998.