The Income Tax and the Supply of Labor

Goode, Richard

doi:10.1086/256866

Cited by 33 publications

(11 citation statements)

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“…These rates are likely to differ due to differences in pre-tax income and available tax preferences. Goode (1949) noted two examples of how relative tax treatments can affect entrepreneurship decisions. First, many expenses related to the entrepreneurial venture are deductible in calculating taxable income, and business deductions for goods such as automobiles and computer equipment are likely to have consumption benefits outside of business use.…”

Section: Introductionmentioning

confidence: 99%

Do Tax Cuts Promote Entrepreneurial Longevity?

Gurley-Calvez¹,

Bruce²

2008

National Tax Journal

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We use a twelve-year panel of tax return data to assess whether or not taxes affect the duration of entrepreneurial activities. In doing so, we provide information to policymakers on the effectiveness of tax policy for influencing the level of entrepreneurial activity. Our study is the first to examine the effects of tax rates on exit decisions using duration analysis techniques.We find convincing evidence that cutting marginal tax rates faced by wage-and-salary workers can reduce the duration of entrepreneurial activities, while cutting marginal tax rates faced by entrepreneurs can lengthen entrepreneurial spells. The relative magnitudes of these effects suggest that an across-the-board tax cut would increase entrepreneurial longevity.

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Section: Introductionmentioning

confidence: 99%

Do Tax Cuts Promote Entrepreneurial Longevity?

Gurley-Calvez¹,

Bruce²

2008

National Tax Journal

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“…However, for expositions not making this incorrect inference, see Goode (1949), and more explicitly Layard-Walters (1978, pp. 82-83).…”

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confidence: 99%

Tax Effects Versus Budget Effects on Labor Supply

Lindbeck

1982

Economic Inquiry

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This paper analyzes the effects on labor supply of parallel changes in taxes and public spending of various types. A number of important recent developments in the labor supply behavior of households are highlighted by such a study of various types of "budget effects," rather than isolated "tax effects." This comes out in particular when considering cross substitution effects on labor supply of changes in public spending on goods and services or of the subsidization of goods and services provided by private markets. Moreover, the income effects of tax changes are often mitigated, or possibly even removed, by the income effects of the accompanying expenditure changes.

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“…Thus, the determination of the true work effort-income tax relation is a matter for empirical investigation to establish. Some examples of the theoretical difficulties encountered in determining how workers will adjust their position, after the imposition of a personal income tax, are mentioned by Otto von Mering (1956), Goode (1949) and Cooper (1952) and are provided below :…”

Section: Simulation Experiments With Spending and Work Effortmentioning

confidence: 99%

Fiscal policy and labour market : testing the reliability of the neoclassical business cycle model

Dalamagas¹

2004

Journal of Statistics and Management Systems

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This paper studies the dynamic behaviour of hours worked per worker in models estimated for four industrialised countries (USA, UK, France and Germany). Our models lead to a rich array of possible responses of aggregate variables to innovations in government purchases which are financed either by lump-sum taxes or by distortionary taxes. We show that our findings cast doubt on the empirical plausibility of both the neoclassical and New Keynesian models. The evidence adduced provides no (systematic) support for the predictions of either model, probably because of conceptual and methodological shortcomings in these models.

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The Income Tax and the Supply of Labor

Cited by 33 publications

References 0 publications

Do Tax Cuts Promote Entrepreneurial Longevity?

Do Tax Cuts Promote Entrepreneurial Longevity?

Tax Effects Versus Budget Effects on Labor Supply

Fiscal policy and labour market : testing the reliability of the neoclassical business cycle model

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