Average Marginal Labor Income Tax Rates under the Affordable Care Act

Casey Mulligan

No 19365, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The Affordable Care Act includes four significant, permanent, implicit unemployment assistance programs, plus various implicit subsidies for underemployment, and expanded Medicaid eligibility for adults. Every sector of the economy, and about half of nonelderly adults, is directly affected by at least one of those provisions. This paper calculates the ACA's impact on the average reward to working among nonelderly household heads and spouses. The law increases marginal tax rates by an average of five percentage points (of employee compensation), on top of the marginal tax rates that were already present before it went into effect. The ACA's addition to labor tax wedges is roughly equivalent to doubling both employer and employee payroll tax rates for half of the population.

JEL-codes: E24 H31 I18 I38 (search for similar items in EconPapers)
Date: 2013-08
New Economics Papers: this item is included in nep-acc, nep-hea, nep-lab, nep-pbe and nep-pub
Note: EFG EH PE
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Citations: View citations in EconPapers (17)

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