Governments implement numerous tax incentives aimed at influencing decisions to participate in the labour market. In addition to the tax scale, various credits, benefits, and clawed-back support measures can create marginal effective tax rates (METR) and effective participation tax rates (EPTR), reducing net gains from work. Although a significant portion of the population shows some sensitivity to financial incentives in their labour supply, the substantial lack of knowledge about tax mechanisms and measures limits their potential effect. The low level of tax literacy, particularly regarding marginal rates and incentive measures, complicates optimal labour supply decision-making. The effectiveness of tax incentive measures depends not only on their design but also on the public’s understanding.
During this webinar, Pierre-Carl Michaud and Guy Lacroix will present their in-depth analyses of the subject, comparing reality and perceptions. The issue of the impact of the Tax Credit for Career Extension (Crédit d'impôt pour prolongation de carrière CIPC) will also be addressed.
