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Agustin Velasquez and Svetlana Vtyurina
Hours worked vary widely across countries and over time. In this paper, we investigate the role played by taxation in explaining these differences for EU New Member States. By extending a standard growth model with novel data on consumption and labor taxes, we assess the evolution of trends in hours worked over the 1995-2017 period. We find that the inclusion of tax rates in the model significantly improves the tracking of hours. We also estimate the elasticity of hours (and its different margins) to quantify the deadweight loss introduced by consumption and labor taxes. We find that these taxes explain a large share of labor supply differences across EU New Member States and that the potential gains from policy actions are noteworthy.
International Monetary Fund. Fiscal Affairs Dept.

. Compared to taxes, the negative labor supply effect of social security contributions can be lower, if the benefits are linked to marginal contributions and valued by workers. 17. Economic theory recommends that the optimal marginal tax rate structure should follow a U-shape according to wage income . Recent developments in optimal taxation draw from the early approach of Mirrlees (1971) . Recognizing that excessive taxation discourages work effort, this theory proposes an optimal tax rate structure based on maximizing social welfare rather than tax revenues. The

Agustin Velasquez and Svetlana Vtyurina

percent) than the one for men (statistically significant at the 5 percent level). This provides further evidence that taxes disincentivize women’s participation in the labor market more than men’s ( de Boer 2018 and Causa 2009 ). When disaggregating labor taxes (columns 2 and 4), we find that the effect of social security contributions on women’s employment decision/status is around 7 percent higher than the one for men. Table 4. Results by Gender and Type of Tax Dependent variable: log(employment rate) Men Women (1) (2

International Monetary Fund. Fiscal Affairs Dept.
This Technical Assistance report presents an international perspective on the employment impact of tax policy, and develops recommendations considering the background in the People’s Republic of China. This report discusses the impact of tax policy including social security contributions on employment in China that covers both the taxation of employed labor and small- and medium-sized enterprises. The findings draw on economic theory, international experiences, as well as discussions with Chinese authorities during a workshop in Yangzhou and meetings in Beijing. The personal income tax on wages is low, but the tax wedge, which includes social security contributions, is high and follows an unsteady pattern, rising, falling, and again rising. The taxation of labor differs strongly by type and location of employment. The schedular system of the personal income tax means that labor taxes differ depending on the category into which income falls. Small businesses are offered some simplifications but are likely to still face disproportionally greater compliance costs.
International Monetary Fund
The Stand-By Arrangement with Bosnia and Herzegovina was approved on May 29, 1998. Bank regulation and supervision have been strengthened over the past year, although procedures continue to fall short of best practice in some areas. The authorities have reformed the sales tax regime to equalize tax rates in the two entities, broaden and unify the base, and simplify the tax system in a broadly revenue neutral manner. IMF staff urged the authorities to accelerate the implementation of modern treasuries.
International Monetary Fund

the World bank PFSAC II, which was disbursed in January 2001 instead of December 2000 as expected. 7 To put this figure in perspective, the seasonal first quarter shortfall in revenues plus external finance was KM 44 million. Thus the authorities managed the shortfall partly by restricting expenditure and partly by accumulating arrears. 8 In the Federation, this partly reflected the revenue effect of social security contribution rates of military personnel and miners that were increased to the standard rates in January 2001. 9 The State Border