Unemployment Insurance Tax Burdens and Benefits: Funding Family Leave and Reforming the Payroll Tax

Patricia Anderson and Bruce Meyer

No 601, Working Papers from Harris School of Public Policy Studies, University of Chicago

Abstract: 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)
Date: 2005-12
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Related works:
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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