Labor Supply Prediction when Tax Avoidance Matters
Mats Persson and
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Hans Sacklén: Trade Union Institute for Economic Research, Postal: Wallingatan 38, SE-111 24 Stockholm
No 1999:16, Working Paper Series from Uppsala University, Department of Economics
We examine how tax avoidance in the form of trade in well-functioning asset markets affects the empirical study of labor supply. We discuss the implications for tax policy analysis, and we show that a failure to account for avoidance responses may lead to huge errors when predicting how tax reform affects labor supply tax revenue, and the welfare cost of taxation. In conclusion we argue that our model may explain a number of otherwise hard to understand dimensions of tax payer response.
Keywords: Labor supply; tax avoidance; asset markets; tax reform simulation (search for similar items in EconPapers)
JEL-codes: H31 J22 (search for similar items in EconPapers)
Pages: 34 pages
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Published in European Journal of Political Economy, 2004, pages 963-982.
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Working Paper: Labor Supply Prediction when Tax Avoidance Matters (1999)
Working Paper: Labour Supply Prediction When Tax Avoidance Matters (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:uunewp:1999_016
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