Optimum income taxation and layoff taxes
By: by Pierre Cahuc, André Zylberberg.
Contributors: Zylberberg, André.
Series: Discussion paper ;; no. 1678; Discussion paper (Forschungsinstitut zur Zukunft der Arbeit : Online) ;; no. 1678
Publisher: IZA
Published: 2005
Place of publication: Bonn, Germany
Language: eng
Format: Electronic resource
Subjects: Income tax; Insurance, Unemployment
Description: "This paper analyzes optimum income taxation in a model with endogenous job destruction that gives rise to unemployment. It is shown that optimal tax schemes comprise both payroll and layoff taxes when the state provides public unemployment insurance and aims at redistributing income. The optimal layoff tax is equal to the social cost of job destruction, which amounts to the discounted value of the sum of unemployment benefits (that the state pays to unemployed workers) and payroll taxes (that the state does not get when workers are unemployed). Our quantitative analysis suggests that the introduction of layoff taxes, that are usually absent from actual tax schemes, could lead to significant increases in employment and GDP"--Forschungsinstitut zur Zukunft der Arbeit web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 8/9/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.