 Taxation, Labour Supply and SavingPatricia Apps () and Ray Rees No 590, CEPR Discussion Papers from Centre for Economic Policy Research, Research School of Economics, Australian National University Abstract: In recent years, the US, UK and Australia have lowered tax rates on high incomes and expanded tax credits and family transfer payments that are withdrawn on the joint income of a couple. These reforms result in significant changes in the structure of marginal and average income tax rates. In this paper we present a case study that examines the impact of reforms of this kind on the structure of tax rates on incomes in Australia. We find that the reforms have led to high effective marginal rates across a wide middle band of earnings and to a shift towards joint taxation. As is well known, joint taxation results in high tax rates on secondary earners, with in consequence undesirable effects on both work incentive and fairness of the income distribution. A lifecycle analysis of time use and saving decisions indicates strong negative effects on female labour supply and household saving. Keywords: Income taxation; family benefits; time allocation; labour supply; lifecycle saving; household production (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:auu:dpaper:590 Access Statistics for this paper More papers in CEPR Discussion Papers from Centre for Economic Policy Research, Research School of Economics, Australian National University Contact information at EDIRC. |
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