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An Analysis of the Impact of Tax and Welfare Reform Measures on Effective Marginal Tax Rates in Australia 1982-2002

Australian Journal of Labour Economics
Volume 11 Issue 3 (Dec 2008)

Abstract: This paper uses a microsimulation model that permits interactions between taxes, government benefits and housing assistance parameters and data from various releases of the Survey of Income and Housing Costs to illustrate how the distribution of effective marginal tax rates has varied between the years of 1982, 1996, 2000 and 2002. The policy impact of changes in the tax-benefit system on effective marginal tax rates is then assessed by applying the real tax-benefit parameters from 1982, 1996 and 2002 to the household composition and income data from a base year (2000). The findings indicate that effective marginal tax rates have increased over the long-term. Even when the impacts of tax-benefit changes are isolated from changes in the composition of the population, policy changes have been insufficient to counteract increases in effective marginal tax rates that have been caused by compositional changes.

To cite this article: Dockery, Alfred Michael; Ong, Rachel; Flatau, Paul and Wood, Gavin A. An Analysis of the Impact of Tax and Welfare Reform Measures on Effective Marginal Tax Rates in Australia 1982-2002 [online]. Australian Journal of Labour Economics, Vol. 11, No. 3, Dec 2008: 203-226. Availability: <http://search.informit.com.au/documentSummary;dn=756492353640290;res=IELBUS> ISSN: 1328-1143. [cited 30 Sep 16].

Personal Author: Dockery, Alfred Michael; Ong, Rachel; Flatau, Paul; Wood, Gavin A; Source: Australian Journal of Labour Economics, Vol. 11, No. 3, Dec 2008: 203-226 Document Type: Journal Article ISSN: 1328-1143 Subject: Income distribution; Statistics; Income maintenance programs; Tax shifting; Statistical matching; Single-parent families--Economic aspects; Identifier: Effective margin tax rates (EMTR) Peer Reviewed: Yes Affiliation: (1) Curtin University of Technology
(2) Curtin Business School, Curtin University of Technology, GPO Box U1987, Perth WA 6845, Australia, email: rachel.ong@cbs.curtin.edu.au
(3) Murdoch University
(4) RMIT University

Database: Business Collection