Wen, Jean-François; Gordon, Daniel V. - In: The Review of Economics and Statistics 96 (2014) 3, pp. 471-482
Do progressive marginal income tax rates discourage self-employment? We assume risk neutrality to construct an implicit surtax on stochastic income relative to steady income, arising from a convex tax schedule. It is computed as part of a structural probit model with earnings equations and a tax...