| Popis: |
I examine two central questions bearing on the optimal relative taxation of employment and self-employment income using the 2009 Polish reform. Firstly, I estimate the degree of substitution on the extensive margin between the employment and self-employment tax bases, as well as the intensive-margin elasticities for these tax bases separately. The baseline estimates of the intensive-margin elasticities are around 0.2 for the employed and around 0.7 for the self-employed. Secondly, I characterize optimal non-linear employment and self-employment tax schedules in a theoretical model, finding rationale for taxation of self-employment income at lower marginal and total tax rates. |
