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Taxing the Working Poor

The Political Origins and Economic Consequences of Taxing Low Wages Achim Kemmerling, Associate Professor for Political Economy, Central European University, Hungary
In most industrialized countries the tax burden of poor people has increased dramatically over the last few decades. This book analyses both the political origins of this increase and its consequences for the labour market.
Extent: 168 pp
Hardback Price: $127.00 Web: $114.30
Publication Date: 2009
ISBN: 978 1 84720 778 4
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  • Economics and Finance
  • Labour Economics
  • Public Sector Economics
  • Social Policy and Sociology
  • Labour Policy
In most industrialized countries the tax burden of poor people has increased dramatically over the last few decades. This book analyses both the political origins of this increase and its consequences for the labour market.

Achim Kemmerling illustrates that tax-based redistribution and employment are not incompatible, and that the shift away from redistribution has not occurred on grounds of economic efficiency. He goes on to show that a long-term shift from capital to labour taxation has provoked conflicts of interests between workers that have weakened the political cause of tax-based redistribution.

This interdisciplinary account of the political economy of taxing low wages explains the historical and structural origins of political tensions between different types of workers and their effects on the performance of labour markets. As such, it will strongly appeal to a wide-ranging audience, including academics, students and researchers with a special interest in political science, political economy, labour markets and the economics of taxation. Practitioners in the field of labour market, social and tax policies interested in the normative consequences of taxation for the labour market will also find the book to be of great interest.
‘Kemmerling deftly intertwines the efficiency theory of taxation with the political basis of taxing the working poor. . . This commendable effort in interdisciplinary study and the comparative analysis of taxation is an essential reference for undergraduate and graduate students, as well as faculty and professionals of economics, political science, and taxation systems of Europe.’
– S. Chaudhuri, Choice

‘Taxing the Working Poor is an inspiring read for political scientists and economists interested in the relationship between taxation and employment. Based on an elegant combination of econometric analysis and historical case studies, it shows that the alleged trade-off between employment and progressive taxation has political rather than economic roots.’
– Philipp Genschel, Jacobs University Bremen, Germany

‘What are the economic and political forces which generate different regimes of tax on labour? What are the implications for the labour market of these different regimes? And does globalisation bring a halt to tax-based redistribution? Achim Kemmerling tackles these and other important questions in this significant book.’
– Malcolm Sawyer, University of Leeds, UK

‘We have been distracted from the detailed problems of financing the welfare state by the tired old twentieth-century debate between libertarian tax minimisers and maximal socialist collectivisers. We have to move on. The welfare state has to be accepted and the detailed problems of taxation to sustain it have to be addressed. This well-researched and fascinating book addresses the political and institutional origins of different tax systems and points to viable strategies of redistribution and reform.’
– Geoffrey M. Hodgson, University of Hertfordshire, UK
Contents: Preface 1. Introduction 2. A Comparative Welfare State Analysis of Tax Mixes 3. The Economics of Taxing Labour 4. Political Economy Applied to Tax Mixes 5. Empirical Evaluation 6. Conclusion: Employment and Redistribution are Not Incompatible Bibliography Index