Labour supply, commodity demand and marginal tax reform

David (David Patrick) Madden

No 199330, Working Papers from School of Economics, University College Dublin

Abstract: This paper examines the implications of extending the Ahmad-Stern (1984) model of indirect tax reform to include labor supply. The inclusion of labor supply alters the basic measure of marginal revenue cost of indirect taxation and introduces the possibility of calculating a marginal revenue cost for direct taxation. The paper derives the expressions for these revised marginal revenue costs and provides estimates from Irish data. It then examines the sensitivity of the results to assumptions regarding functional form and, in particular, goods/leisure separability.

Keywords: Indirect taxation; Labor supply--Effect of taxation on (search for similar items in EconPapers)
Date: 1993-12
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http://hdl.handle.net/10197/1742 First version, 1993 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:ucn:wpaper:199330

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