The Impact of Labor Taxes on Labor Supply: An International Perspective

As the Bush-era tax cuts are set to expire in 2010, ambitious health care legislation has passed Congress, and entitlement programs are growing at unsustainable rates, U.S. policymakers face important questions about the optimal size and scope of federal spending. The federal government finances its spending mostly through labor taxes-including taxes on income, payroll, and consumption-which generate significant disincentives for employment. In The Impact of Labor Taxes on Labor Supply: An ...