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The question to consider is whether mandatory measures are cost effective, once the incentive effects of those measures are taken into account.
Includes a nice discussion of incentive effects.
The main question is whether these incentive effects are large.
That is partly because, like supply-siders, they emphasize the incentive effects of cutting the top marginal rate; they just don't believe that those incentive effects are big enough that tax cuts pay for themselves.
If the incentive effects are small, however, the situation is very different.
THINK AT THE MARGIN Republicans worry about the adverse incentive effects of high marginal tax rates.
Promotion between job grades depends upon criteria over which managerial discretion has stronger incentive effects.
It's important to consider the "incentive effects" of government policies, he continued.
Cutting tax expenditures would probably have fewer undesirable incentive effects than raising marginal tax rates.
Without getting too deep into the discussion, it's worth considering the incentive effects of ridiculous income levels on talent allocation.
The incentive effects of option grants, as opposed to grants of actual shares, have long been debated.
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