2017
DOI: 10.3386/w23849
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What Goes Up May Not Come Down: Asymmetric Incidence of Value-Added Taxes

Abstract: for their helpful suggestions and comments. Tero Hokkanen, Jen Kades and Carolina Kansikas provided outstanding research assistance. Harju gratefully acknowledges financial support from the Foundation for Economic Education. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

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Cited by 43 publications
(47 citation statements)
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“…This paper also relates to a number of recent papers that investigate the impact of windfall gains or losses on firms' employment. In a paper closest to ours, Saez, Schoefer and Seim (2017) show that in Sweden, firms with a larger share of young workers expand employment relative to firms with an older workforce in response to a payroll tax cut targeted 2 This echoes the findings of Benzarti, Carloni, Harju and Kosonen (2017) on price responses to the value-added taxes in Europe. 3 A number of studies further use micro data and reform-induced changes in national payroll taxes levied on firms, but for particular groups of workers.…”
Section: Introductionsupporting
confidence: 61%
“…This paper also relates to a number of recent papers that investigate the impact of windfall gains or losses on firms' employment. In a paper closest to ours, Saez, Schoefer and Seim (2017) show that in Sweden, firms with a larger share of young workers expand employment relative to firms with an older workforce in response to a payroll tax cut targeted 2 This echoes the findings of Benzarti, Carloni, Harju and Kosonen (2017) on price responses to the value-added taxes in Europe. 3 A number of studies further use micro data and reform-induced changes in national payroll taxes levied on firms, but for particular groups of workers.…”
Section: Introductionsupporting
confidence: 61%
“…The latter is confirmed by Kosonen (2015), who also documents asymmetries in the pass-through of tax increases and decreases in reduced rates (see also Benzarti, Carloni, Harju, Kosonen, 2017).…”
supporting
confidence: 55%
“…Since our dataset ends in 2013, we cannot yet analyze the effects of the repeal. Studying whether the effects of the repeal are symmetric to the effects of the tax cut will be interesting (in light of compelling new evidence of asymmetric responses to tax increases versus decreases by Benzarti et al 2017). We plan to study the repeal in future research.…”
Section: Figure 1 Preferential Payroll Tax Rate For Young Workersmentioning
confidence: 99%