Income taxes and the composition of pay
By: by Giorgio Brunello, Simona Comi, Daniela Sonedda
Contributors: Comi, Simona
Series: Discussion paper -- no. 2203; Discussion paper (Forschungsinstitut zur Zukunft der Arbeit : Online) -- no. 2203
Publisher: IZA
Published: 2006
Place of publication: Bonn, Germany
Language: eng
Format: [electronic resource] /
Subjects: Income tax; Wages
Description: "According to the standard principal-agent model, the optimal composition of pay should balance the provision of incentives with the individual demand for insurance. Do income taxes alter this balance? We show that the relative share of PRP on total pay is reduced by higher average taxes, and is affected in a complex way by higher marginal tax rates. Empirical evidence based on the British Household Panel Survey, which exploits the UK 1999 Tax Reform, supports the theoretical predictions of the tax-augmented principal-agent model"--Forschungsinstitut zur Zukunft der Arbeit web site.
Notes: Title from PDF file as viewed on 7/12/2006.

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