Economics, Econometrics and Finance
4 years ago

Marginal taxes negatively impact lower wages, benefit higher earners.

RePEc: Research Papers in Economics
Marginal Taxes: A Good or a Bad for Wages?: The Incidence of the Structure of Income and Labor Taxes on Wages
Pia Rattenhuber

Paper Summary

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The study looked at how income tax rates affect wages using data from 2002 to 2008. By using a detailed model, researchers found that higher marginal taxes generally lead to lower wages. However, this effect is stronger for lower-wage workers compared to those earning more.