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'I] Feldstein (1999) suggests that estimates of the elasticity of labour supply underestimate the deadweight loss of the income tax compared to estimates based on the elasticity of taxable income (ETI). Demonstrate within an appropriate model the effect of taxes on labour supply. Discuss the differences between the predictions from this model and the discussion of the ETI in Feldstein. Assess how empirical estimates of the ETI may guide tax policy. Feldstein, M, 1999. Tax Avoidance and the Deadweight Loss of the Income Tax. The Review of Economics and Statistics, 81 (4), 674-680