Labor Supply Prediction when Tax Avoidance Matters
1999 (English)Report (Other academic)
We examine how tax avoidance in the form of trade in well-functioning asset markets affects the emipircal 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.
Place, publisher, year, edition, pages
Stockholm: IIES , 1999. , 43 p.
Seminar Paper / Institute for International Economic Studies, Stockholm University, ISSN 0347-8769 ; 679
Labor supply, tax avoidance, asset markets, tax reform simulation
IdentifiersURN: urn:nbn:se:su:diva-41143OAI: oai:DiVA.org:su-41143DiVA: diva2:328479