Unemployment Insurance Tax Burdens and Benefits: Funding Family Leave and Reforming the Payroll Tax
Patricia Anderson and
No 601, Working Papers from Harris School of Public Policy Studies, University of Chicago
We examine the distributional consequences of the Unemployment Insurance (UI) payroll tax. Applying the ability-to-pay principle of equity, the UI payroll tax is quite regressive, while applying the benefits principle makes the UI program look quite good. We then simulate a revenue-neutral increase of the UI tax base to the OASDI tax base level, which appears equity-enhancing under the ability-to-pay principle, but has mixed effects under the benefits principle. Finally, providing family leave within the UI system would maintain the regressivity that violates the ability-to-pay principle of equity, but would agree much better with the benefits principle.
Keywords: unemployment insurance; payroll tax; family leave (search for similar items in EconPapers)
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Journal Article: Unemployment Insurance Tax Burdens and Benefits: Funding Family Leave and Reforming the Payroll Tax (2006)
Working Paper: Unemployment Insurance Tax Burdens and Benefits: Funding Family Leave and Reforming the Payroll Tax (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:har:wpaper:0601
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