Taxes and Fringe Benefits Offered by Employers / William M. Gentry, Eric Peress.

By:

Gentry, William M

Contributor(s):

Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w4764.Publication details: Cambridge, Mass. National Bureau of Economic Research 1994.Description: 1 online resource: illustrations (black and white)Subject(s):

H32 - Firm

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Abstract: Using cross-sectional data for blue and white collar workers for U.S. cities, we examine how the tax treatment of fringe benefits affects whether employers offer benefits. Differences in state-level income taxes cause variation across places in the tax incentives for fringe benefits. We find that employers respond to tax incentives to offer fringe benefits, especially to blue collar workers. The tax incentives affect both the probability of basic benefits, such as medical coverage, and more 'marginal' benefits, such as vision and dental coverage. Higher taxes also reduce the amount of explicit cost sharing for some benefits between employers and employees.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w4764 (Browse shelf(Opens below))	Not For Loan

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Previous	nber w4761 Toward a Modern Macroeconomic Model Usable for Policy Analysis /	nber w4762 How America Graduated from High School: 1910 to 1960 /	nber w4763 Interstate Cigarette Bootlegging: Extent, Revenue Losses, and Effects of Government Intervention /	nber w4764 Taxes and Fringe Benefits Offered by Employers /	nber w4765 What Ends Recessions? /	nber w4766 Mass Layoffs and Unemployment /	nber w4767 Agglomeration Benefits and Location Choice: Evidence from Japanese Manufacturing Investment in the United States /	Next

June 1994.

Using cross-sectional data for blue and white collar workers for U.S. cities, we examine how the tax treatment of fringe benefits affects whether employers offer benefits. Differences in state-level income taxes cause variation across places in the tax incentives for fringe benefits. We find that employers respond to tax incentives to offer fringe benefits, especially to blue collar workers. The tax incentives affect both the probability of basic benefits, such as medical coverage, and more 'marginal' benefits, such as vision and dental coverage. Higher taxes also reduce the amount of explicit cost sharing for some benefits between employers and employees.