Jerry Hausman’s paper makes major contributions to both the labor supply and taxation literatures. His paper provides the most reliable labor supply estimates to date since he takes account of the nonlinear budget constraint created by federal and state income taxes. His work also helps rectify the misleading approach taken by politicians, the popular press, and many economists which stresses the revenue effects of tax cuts: The relevant question is the welfare effect of tax cuts. Hausman is able (amazingly enough!) to rigorously calculate the deadweight loss imposed by a tax.