This paper examines the implications of extending the Ahmad-Stern (1984) model of indirect tax reform to include labor supply. The inclusion of labor supply alters the basic measure of marginal revenue cost of indirect taxation and introduces the possibility of calculating a marginal revenue cost for direct taxation. The paper derives the expressions for these revised marginal revenue costs and provides estimates from Irish data. It then examines the sensitivity of the results to assumptions regarding functional form and, in particular, goods/leisure separability.
External Notes
A hard copy is available in UCD Library at GEN 330.08 IR/UNI
Sponsorship
Foundation for Fiscal Studies
EC HCM Network
Type of Material
Working Paper
Publisher
University College Dublin. School of Economics
Series
UCD Centre for Economic Research Working Paper Series
WP93/30
Subject – LCSH
Indirect taxation
Labor supply--Effect of taxation on
Language
English
Status of Item
Not peer reviewed
This item is made available under a Creative Commons License
