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Using Micro-Data to Assess Average Tax Rates

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  • W. Steven Clark

Abstract

Measuring effective tax rates using tax revenue data is attractive, given that revenues collected capture the net effect of tax provisions and taxpayer behaviour that are difficult to model. Yet reliance on aggregate tax and income data requires restrictive assumptions and significantly limits the scope of analysis. This paper considers advantages of relying on micro-data gathered from tax returns to assess average tax rates on labour, capital and transfer income and presents some illustrative results. The analysis emphasises the importance of matching taxpayerlevel information to income flows, and notes difficulties in interpreting tax rates that average over all taxpayers. It also illustrates the importance of loss adjustments in measuring effective tax rates on capital income, and reports evidence of significant variation in corporate average tax rates by sector and firm size.

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  • W. Steven Clark, 2003. "Using Micro-Data to Assess Average Tax Rates," CESifo Working Paper Series 966, CESifo.
    • Handle: RePEc:ces:ceswps:_966
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    References listed on IDEAS

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    1. David Carey & Harry Tchilinguirian, 2000. "Average Effective Tax Rates on Capital, Labour and Consumption," OECD Economics Department Working Papers 258, OECD Publishing.
    2. Mendoza, Enrique G. & Razin, Assaf & Tesar, Linda L., 1994. "Effective tax rates in macroeconomics: Cross-country estimates of tax rates on factor incomes and consumption," Journal of Monetary Economics, Elsevier, vol. 34(3), pages 297-323, December.
    3. Richard Blundell, 1992. "Labour supply and taxation: a survey," Fiscal Studies, Institute for Fiscal Studies, vol. 13(3), pages 15-40, January.
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    Cited by:

    1. Pierre Salmon, 2003. "The assignment of powers in an open-ended European Union," Post-Print hal-00445601, HAL.
    2. Deborah Knirsch, 2007. "Measuring tax distortions with neutrality-based effective tax rates," Review of Managerial Science, Springer, vol. 1(2), pages 151-165, August.
    3. Alena Andrejovská & Monika Hudáková, 2016. "Classification of EU Countries in the Context of Corporate Income Tax," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 64(5), pages 1699-1708.

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