The Indirect Effect of Marginal Tax on the Wage (optional material)
Of course, in the new market equilibrium, the wage of labor tends to equal its total marginal disutility to the worker (p. 4.8:10), which now includes the marginal tax. But the quantity of labor exchanged has also diminished, altering both its supply and its demand. Consequently, it would be a gross oversimplification to conclude that the worker passes on the new marginal tax by charging a correspondingly higher wage.

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