economic theory, econometrics, and public finance. Since the greatest share of federal tax revenue, approximately 50 in 1980 … economic theory and econometrics need to be treated. First, the effect of progressive taxation is to create a convex, non …-linear budget set where the net, after-tax wage depends on hours worked. Since most of consumer theory is based on constant market …

.Sections 1 and 2 develop the theory and econometric techniques for models of labor supply with taxes. Section 3 discusses the …