Arbeitspapier

Tax progression under collective wage bargaining and individual effort determination

We study the impact of tax policy on wage negotiations, workers' effort, employment, output and welfare when workers' effort is only imperfectly observable. We show that the different wage-setting motives - rent sharing and effort incentives - reinforce the effects of partial tax policy measures but not necessarily those of more fundamental tax reforms. Although a higher degree of tax progression always leads to wage moderation, the well-established result from the wage bargaining literature that a revenue-neutral increase in the degree of tax progression is good for employment does not carry over to the case with wage negotiations and imperfectly observable effort. While it remains true that introducing tax progression increases employment and output, we cannot rule out negative effects from an increase in tax progression when tax progression is already very high. Welfare effects are ambiguous a priori but we derive sufficient conditions for welfare improving revenue-neutral increases in tax progression.

Sprache
Englisch

Erschienen in
Series: CESifo Working Paper ; No. 2024

Klassifikation
Wirtschaft
Labor Contracts
Trade Unions: Objectives, Structure, and Effects
Taxation and Subsidies: Incidence
Thema
Steuerprogression
Steuerwirkung
Lohnverhandlungstheorie
Leistungsmotivation
Beschäftigungseffekt
Makroökonomischer Einfluss
Theorie

Ereignis
Geistige Schöpfung
(wer)
Koskela, Erkki
Schöb, Ronnie
Ereignis
Veröffentlichung
(wer)
Center for Economic Studies and ifo Institute (CESifo)
(wo)
Munich
(wann)
2007

Handle
Letzte Aktualisierung
10.03.2025, 11:46 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Koskela, Erkki
  • Schöb, Ronnie
  • Center for Economic Studies and ifo Institute (CESifo)

Entstanden

  • 2007

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