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Content archived on 2024-06-18

The Effects of Payroll Tax Caps and Payroll Tax Changes on the Distribution of Earnings

Objective

This project analyzes the effects of capped payroll taxes on the distributions of labor costs, gross and net earnings. Such payroll taxes impose a flat tax rate, divided between employee and employers, on earnings up to an earnings cap above which the marginal tax rate drops to zero. With no labor supply responses, standard theory predicts that the density distribution of labor costs (earnings inclusive of all payroll taxes) should be smooth around the cap and hence that the density distribution of net-of-tax earnings should display a discontinuity at the cap. The theory also predicts that year to year net-of-tax pay raises should be higher for workers above the payroll tax cap than for workers below the cap. Such predictions can be empirically evaluated with new microdata bases. The project also studies the individual and firm responses to payroll tax changes.

Fields of science (EuroSciVoc)

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Keywords

Project’s keywords as indicated by the project coordinator. Not to be confused with the EuroSciVoc taxonomy (Fields of science)

Topic(s)

Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.

Call for proposal

Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.

FP7-PEOPLE-2007-2-1-IEF
See other projects for this call

Funding Scheme

Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.

MC-IEF - Intra-European Fellowships (IEF)

Coordinator

THE CHANCELLOR, MASTERS AND SCHOLARS OF THE UNIVERSITY OF OXFORD
EU contribution
€ 160 091,96
Address
WELLINGTON SQUARE UNIVERSITY OFFICES
OX1 2JD Oxford
United Kingdom

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Region
South East (England) Berkshire, Buckinghamshire and Oxfordshire Oxfordshire
Activity type
Higher or Secondary Education Establishments
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Total cost

The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.

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