Working Paper: NBER ID: w13745
Authors: Martin S. Feldstein
Abstract: This paper discusses how the effects of taxes on economic behavior are important for revenue estimation, for calculating efficiency effects, and for understanding short-term macroeconomoic consequences. The primary focus is on taxes on labor income but some attention is given to taxes on income from saving. Specific calculations illustrate the importance of behavioral responses for accurate calculation of the revenue effects and deadweight losses of tax changes.
Keywords: No keywords provided
JEL Codes: H2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Increase in tax rates (H29) | Decrease in taxable income (H29) |
| Higher taxes (H29) | Deadweight losses (H21) |
| Behavioral responses of taxpayers (H26) | Revenue consequences of tax rate changes (H22) |
| Decrease in taxable income (H29) | Lower payroll tax revenue (H29) |