Economics, Econometrics and Finance
8 years ago

Income tax system favors self-employment, leading to inefficient labor allocation.

1 view
National Tax Journal
THE INCOME TAX AND SELF-EMPLOYMENT
James E. Long

Paper Summary

The income tax system may lead people to choose self-employment over regular jobs because self-employed individuals may pay lower taxes. This tax difference can cause inefficiencies in the labor market and increase the overall cost of the income tax system.

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