Earnings Responses to Increases in Payroll Taxes by Liebman and Saez

1. Earnings Responses to Increases in Payroll Taxesby Liebman and Saez Discussion by Leora Friedberg, University of Virginia and NBER Conference on “Pathways to a Secure Retirement”

2. Raising the payroll tax limit • Google on “Social Security reform proposals”

3. Raising the payroll tax limit • Google on “Social Security reform proposals” 1. www.whitehouse.gov – not really

4. Raising the payroll tax limit • Google on “Social Security reform proposals” 1. www.whitehouse.gov – not really “He [Bush] will listen to any good idea that does not include raising payroll taxes.”

5. Raising the payroll tax limit • Google on “Social Security reform proposals” 1. www.whitehouse.gov – not really 2. www.brookings.edu – yes

6. Raising the payroll tax limit • Google on “Social Security reform proposals” 1. www.whitehouse.gov – not really 2. www.brookings.edu – yes 3. www.cato.org – no

7. Raising the payroll tax limit • Google on “Social Security reform proposals” 1. www.whitehouse.gov – not really 2. www.brookings.edu – yes 3. www.cato.org – no same as 5. www.socialsecurity.org

8. Raising the payroll tax limit • Google on “Social Security reform proposals” 1. www.whitehouse.gov – not really 2. www.brookings.edu – yes 3, 5. www.cato.org – no

9. Raising the payroll tax limit • Google on “Social Security reform proposals” 1. www.whitehouse.gov – not really 2. www.brookings.edu – yes 3, 5. www.cato.org – no 7. www.heritage.org – no

10. Raising the payroll tax limit • Google on “Social Security reform proposals” 1. www.whitehouse.gov – not really 2. www.brookings.edu – yes 3, 5. www.cato.org – no 7. www.heritage.org – no 9. www.ksg.harvard.edu/jeffreyliebman – yes

11. Raising the payroll tax limit • Google on “Social Security reform proposals” 1. www.whitehouse.gov – not really 2. www.brookings.edu – yes 3, 5. www.cato.org – no 7. www.heritage.org – no 9. www.ksg.harvard.edu/jeffreyliebman – yes same as 11. voxbaby.blogspot.com

12. Raising the payroll tax limit • Google on “Social Security reform proposals” 1. www.whitehouse.gov – not really 2. www.brookings.edu – yes 3, 5. www.cato.org – no 7. www.heritage.org – no 9, 11. www.ksg.harvard.edu/jeffreyliebman – yes

13. Raising the payroll tax limit • Google on “Social Security reform proposals” 1. www.whitehouse.gov – not really 2. www.brookings.edu – yes 3, 5. www.cato.org – no 7. www.heritage.org – no 9, 11. www.ksg.harvard.edu/jeffreyliebman – yes 15. www.ncpa.org – vague, probably not

14. Raising the payroll tax limit • Google on “Social Security reform proposals” 1. www.whitehouse.gov – not really 2. www.brookings.edu – yes 3, 5. www.cato.org – no 7. www.heritage.org – no 9, 11. www.ksg.harvard.edu/jeffreyliebman – yes 15. www.ncpa.org – vague, probably not 21. www.house.gov/defazio – yes

15. Raising the payroll tax limit • Impact on labor supply

16. Raising the payroll tax limit • Impact on labor supply  alters return to earning wages

17. Raising the payroll tax limit • Impact on labor supply  alters return to earning wages post-tax earnings 1-inc slope 1-inc-payroll $90,000 pre-tax earnings

18. Raising the payroll tax limit • Impact on labor supply  alters return to earning wages post-tax earnings 1-inc slope 1-inc- 0.124 $90,000 pre-tax earnings

19. Raising the payroll tax limit • Impact on labor supply post-tax earnings 1-inc slope 1-inc- 0.124 $90,000 pre-tax earnings

20. Raising the payroll tax limit • Impact on labor supply post-tax earnings 1-inc slope 1-inc- 0.124 $90,000 pre-tax earnings

21. Raising the payroll tax limit • Impact on labor supply post-tax earnings 1-inc slope 1-inc- 0.124 $90,000 pre-tax earnings

22. Raising the payroll tax limit • Impact on labor supply  empirical test #1 post-tax earnings 1-inc slope 1-inc- 0.124 $90,000 pre-tax earnings

23. Raising the payroll tax limit • Impact on labor supply  empirical test #1 results post-tax earnings 1-inc slope 1-inc- 0.124 $90,000 pre-tax earnings

24. Raising the payroll tax limit • Impact on labor supply  empirical test #1 results: people don’t avoid “reverse kink” post-tax earnings 1-inc slope 1-inc- 0.124 $90,000 pre-tax earnings

25. Raising the payroll tax limit • Impact on labor supply people don’t avoid “reverse kink”, either because … post-tax earnings 1-inc slope 1-inc- 0.124 $90,000 pre-tax earnings

26. Raising the payroll tax limit • Impact on labor supply people don’t avoid “reverse kink”, either because … post-tax earnings  X 1-inc slope 1-inc- 0.124 $90,000 pre-tax earnings

27. Raising the payroll tax limit • Impact on labor supply people don’t avoid “reverse kink”, either because … labor supply is very inelastic post-tax earnings  X 1-inc slope 1-inc- 0.124 $90,000 pre-tax earnings

28. Raising the payroll tax limit • Impact on labor supply people don’t avoid “reverse kink”, or else because … post-tax earnings 1-inc slope 1-inc- 0.124 $90,000 pre-tax earnings

29. Raising the payroll tax limit • Impact on labor supply people don’t avoid “reverse kink”, or else because … post-tax earnings X  ? 1-inc slope 1-inc- 0.124 $90,000 pre-tax earnings

30. Raising the payroll tax limit • Impact on labor supply people don’t avoid “reverse kink”, or else because … they’re confused post-tax earnings X  ? 1-inc slope 1-inc- 0.124 $90,000 pre-tax earnings

31. Raising the payroll tax limit • Impact on labor supply post-tax earnings 1-inc slope 1-inc- 0.124 $90,000 pre-tax earnings

32. Raising the payroll tax limit • Impact on labor supply of raising payroll tax limit post-tax earnings 1-inc slope 1-inc- 0.124 $90,000 pre-tax earnings

33. Raising the payroll tax limit • Impact on labor supply of raising payroll tax limit post-tax earnings 1-inc slope 1-inc- 0.124 $90,000 pre-tax earnings

34. Raising the payroll tax limit • Impact on labor supply of eliminating payroll tax limit post-tax earnings 1-inc slope 1-inc- 0.124 $90,000 pre-tax earnings

35. Raising the payroll tax limit • Impact on labor supply of eliminating payroll tax limit post-tax earnings slope 1-inc- 0.124 $90,000 pre-tax earnings

36. Raising the payroll tax limit • Impact on labor supply post-tax earnings 1-inc slope 1-inc- 0.124 $90,000 pre-tax earnings

37. Raising the payroll tax limit • Impact on labor supply (more accurate) post-tax earnings 1-inc2 1-inc2- 0.124 slope 1-inc1- 0.124 $90,000 pre-tax earnings

38. Raising the payroll tax limit • Impact on labor supply of changing income tax rates on high earners post-tax earnings 1-inc2 1-inc2- 0.124 slope 1-inc1- 0.124 $90,000 pre-tax earnings

39. Raising the payroll tax limit • Impact on labor supply of changing income tax rates on high earners post-tax earnings 1-’inc2 1-’inc2- 0.124 slope 1-inc1- 0.124 $90,000 pre-tax earnings

40. Raising the payroll tax limit • Impact on labor supply of changing income tax rates on high earners  empirical test #2’ post-tax earnings 1-’inc2 1-’inc2- 0.124 slope 1-inc1- 0.124 $90,000 pre-tax earnings

41. Raising the payroll tax limit • Impact on labor supply of changing income tax rates on high earners post-tax earnings 1-’inc2 1-’inc2- 0.124 slope 1-inc1- 0.124 $90,000 pre-tax earnings

42. Raising the payroll tax limit • Impact on labor supply of changing income tax rates on high earners post-tax earnings 1-’’inc2 1-’’inc2- 0.124 slope 1-inc1- 0.124 $90,000 pre-tax earnings

43. Raising the payroll tax limit • Impact on labor supply of changing income tax rates on high earners  empirical test #2’’ post-tax earnings 1-’’inc2 1-’’inc2- 0.124 slope 1-inc1- 0.124 $90,000 pre-tax earnings

44. Raising the payroll tax limit • Summary #1 little evidence that people avoid “reverse kink” #2’ little evidence that labor supply increased following TRA 86 #2’’ little evidence that labor supply decreased following OBRA 93

45. Raising the payroll tax limit • Summary #1 little evidence that people avoid “reverse kink” #2’ little evidence that labor supply increased following TRA 86 #2’’ little evidence that labor supply decreased following OBRA 93

46. Raising the payroll tax limit • Summary #1 little evidence that people avoid “reverse kink” #2’ little evidence that labor supply increased following TRA 86 #2’’ little evidence that labor supply decreased following OBRA 93

47. Raising the payroll tax limit • Policy implication could raise payroll tax limit without adverse effects on labor supply, tax revenue • Caveats data: not very recent underlying assumptions: what if labor demand is not perfectly elastic? policy implication: what if raising payroll tax limit reduces confusion?

48. Raising the payroll tax limit • Policy implication could raise payroll tax limit without adverse effects on labor supply, tax revenue • Caveats data: not very recent underlying assumptions: what if labor demand is not perfectly elastic? policy implication: what if raising payroll tax limit reduces confusion?

49. Raising the payroll tax limit • Policy implication could raise payroll tax limit without adverse effects on labor supply, tax revenue • Caveats data: not very recent underlying assumptions: what if labor demand is not perfectly elastic? policy implication: what if raising payroll tax limit reduces confusion?

50. Raising the payroll tax limit • Policy implication could raise payroll tax limit without adverse effects on labor supply, tax revenue • Caveats data: not very recent underlying assumptions: what if labor demand is not perfectly elastic? policy implication: what if raising payroll tax limit reduces confusion?