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Title: How Does Tax-Progressivity Affect OECD Laffer Curves?

Citation Type: Miscellaneous

Publication Year: 2013

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Abstract: The recent public debt crisis in most developed economies implies an urgent need for increasing tax revenues or cutting government spending. In this paper we study the importance of household heterogeneity and the progressivity of the labor income tax schedule for the ability of the government to generate tax revenues. We develop an overlapping generations model with uninsurable idiosyncratic risk, endogenous human capital accumulation as well as labor supply decisions along the intensive and extensive margins. We calibrate the model to macro, micro and tax data from the US as well as X European countries, and then for each country characterize the labor income tax Laffer curve under the current country-specific choice of the progressivity of the labor income tax code. We find... (has to be updated as we go along).

Url: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.413.1944&rep=rep1&type=pdf

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Authors: Holter, Hans, A; Krueger, Dirk; Stepanchuk, Serhiy

Publisher: NBER

Data Collections: IPUMS USA

Topics: Other

Countries: United States