| 来源类型 | Discussion paper |
| 规范类型 | 论文 |
| 来源ID | DP14648 |
| DP14648 Redistribution with Performance Pay | |
| Nicolas Werquin; Pawel Doligalski; Abdoulaye Ndiaye | |
| 发表日期 | 2022-04-23 |
| 出版年 | 2022 |
| 语种 | 英语 |
| 摘要 | Half of the jobs in the U.S. feature pay-for-performance. We derive novel incidence and optimum formulas for the overall rate of tax progressivity and the top tax rates on total earnings and bonuses, when such labor contracts arise from moral hazard frictions within firms. Optimal taxes account for the fiscal externalities and welfare consequences of two distinct forces: a direct crowding-out of private insurance and a countervailing crowding-in due to endogenous labor effort responses. These imply that the amount of pre-tax earnings risk to which the worker is exposed is roughly invariant to tax progressivity, whereas the (adverse) welfare consequences of the crowd-out outweigh those of the crowd-in. Quantitatively, the optimal tax policy with performance-pay contracts is close to that prescribed by standard models that treat pre-tax earnings risk as exogenous. Finally, we uncover an efficiency-based argument for taxing bonuses at strictly lower rates than base earnings.Half of the jobs in the U.S.~feature pay-for-performance. We derive novel incidence and optimum formulas for the overall rate of tax progressivity and the top tax rates on total earnings and bonuses, when such labor contracts arise from moral hazard frictions within firms. Optimal taxes account for the fiscal externalities and welfare consequences of two distinct forces: a direct crowding-out of private insurance and a countervailing crowding-in due to endogenous labor effort responses. These imply that the amount of pre-tax earnings risk to which the worker is exposed is roughly invariant to tax progressivity, whereas the (adverse) welfare consequences of the crowd-out outweigh those of the crowd-in. Quantitatively, the optimal tax policy with performance-pay contracts is close to that prescribed by standard models that treat pre-tax earnings risk as exogenous. Finally, we uncover an efficiency-based argument for taxing bonuses at strictly lower rates than base earnings. |
| 主题 | Public Economics |
| 关键词 | Performance pay Moral hazard Endogenous wages Optimal taxation Social insurance Bonus taxes |
| URL | https://cepr.org/publications/dp14648-1 |
| 来源智库 | Centre for Economic Policy Research (United Kingdom) |
| 资源类型 | 智库出版物 |
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/546245 |
| 推荐引用方式 GB/T 7714 | Nicolas Werquin,Pawel Doligalski,Abdoulaye Ndiaye. DP14648 Redistribution with Performance Pay. 2022. |
| 条目包含的文件 | 条目无相关文件。 | |||||
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