14
OCT 2013Posted by Dwight Steward, Ph.D. | Earnings
In earnings losses analyses which is relevant: total earnings or total taxable earnings?
A: Total earnings. Taxes and tax laws are subject to change. Additionally, fringe benefit values, such as those obtained from US BLS are based on earnings not taxable income.
Bottom line: tax treatments generally need to be backed out of income numbers when analyzing earnings losses.