The effects of collecting income taxes on social security benefits John Bailey Jones, Yue Li
By: Jones, John Bailey
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Contributor(s): Li, Yue.
Material type: 
ArticlePublisher: 2018Subject(s): SEGURIDAD SOCIAL | EMPLEO | IMPUESTOS | MODELOS ECONOMETRICOSOnline resources: Click here to access online
In:
Journal of Public Economics n. 159, 2018, p. 125-145Summary: Since 1983, Social Security benefits have been subject to income taxation, a provision that can significantly
increase the marginal income tax rate for older individuals. To assess the impact of this tax, we construct and calibrate a detailed life-cycle model of labor supply, saving, and Social Security claiming. We find that in a longrun stationary environment, replacing the taxation of Social Security benefits with a revenue-equivalent change in the payroll tax would increase labor supply, consumption, and welfare. From an ex-ante perspective an equally desirable reform would be to make the portion of benefits subject to income taxes completely independent of other income.
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| Artículos | IEF | IEF | OP 730/2018/159-2 (Browse shelf) | Available | OP 730/2018/159-2 |
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| OP 730/2018/157-1 Taxes, informality and income shifting | OP 730/2018/158 Journal of Public Economics | OP 730/2018/159 Journal of Public Economics | OP 730/2018/159-2 The effects of collecting income taxes on social security benefits | OP 730/2018/159-3 The right type of legislator | OP 730/2018/160 Journal of Public Economics | OP 730/2018/160-1 Tax compliance and fiscal externalities |
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Resumen.
Bibliografía.
Since 1983, Social Security benefits have been subject to income taxation, a provision that can significantly
increase the marginal income tax rate for older individuals. To assess the impact of this tax, we construct and calibrate a detailed life-cycle model of labor supply, saving, and Social Security claiming. We find that in a longrun stationary environment, replacing the taxation of Social Security benefits with a revenue-equivalent change in the payroll tax would increase labor supply, consumption, and welfare. From an ex-ante perspective an equally desirable reform would be to make the portion of benefits subject to income taxes completely independent of other income.
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