The article explores how changes in taxes and wages can impact employment, inequality, and poverty. By using a model that considers different abilities and a union wage floor, the researchers found that reducing labor taxes can boost employment for low-skilled workers but may increase poverty for those who remain unemployed. To improve employment without raising inequality, a combination of tax cuts and wage moderation is needed. Depending on priorities, reducing taxes on employers or employees can be more effective. To address inequality and poverty, unions may need to moderate wages and provide transfers to those below the poverty line who actively seek work. These findings focus on long-term effects and may require additional policies to be successful.