It is a widely held popular belief that the more progressive is the tax system, the greater is the disincentive to work effort. This belief can be justified within the context of conventional labour supply analysis. Increased progression with unchanged tax revenues decreases work effort and is...

According to the conventional theory of competitive labour markets formal incidence of income and payroll taxes is irrelevant in the sense that it does not matter in terms of welfare effects which side the tax is levied on.In this paper this issue is re-examined under imperfectly competitive...