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Working paper

Average Marginal Income Tax Rates for New Zealand, 1907-2009 (WP 12/04)

Issue date: 
Wednesday, 26 September 2012
Status: 
Current
View point: 
Document Date: 
Publication category: 
JEL classification: 
H24 - Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
H31 - Fiscal Policies and Behavior of Economic Agents: Household
ISBN: 
978-0-478-39672-0

Formats and related files

This paper reports estimates of a number of personal marginal income tax rate measures for New Zealand since 1907, focusing mainly on the aggregate income-weighted average MTRs proposed by Barro and Sahasakul (1983, 1986) and Barro and Redlick (2011).

Abstract

Estimates of marginal tax rates (MTRs) faced by individual economic agents, and for various aggregates of taxpayers, are important for economists testing behavioural responses to changes in those tax rates. This paper reports estimates of a number of personal marginal income tax rate measures for New Zealand since 1907, focusing mainly on the aggregate income-weighted average MTRs proposed by Barro and Sahasakul (1983, 1986) and Barro and Redlick (2011). The paper describes the methodology used to derive the various MTRs from original data on incomes and taxes from Statistics New Zealand Official Yearbooks (NZOYB), and discusses the resulting estimates.

This Working Paper is available in Adobe PDF and HTML. Using PDF Files

Acknowledgements

We are grateful to: Sandra Watson of the Inland Revenue department for undertaking the tax rate calculations for 1981-2009, using IR unit record data; University of Auckland for their contribution via the Research Grant #3627069; and Keith Rankin of the University of Auckland for valuable discussions on the history of the NZ tax system.

Disclaimer

The views, opinions, findings, and conclusions or recommendations expressed in this Working Paper are strictly those of the author(s). They do not necessarily reflect the views of the New Zealand Treasury or the New Zealand Government. The New Zealand Treasury and the New Zealand Government take no responsibility for any errors or omissions in, or for the correctness of, the information contained in these working papers. The paper is presented not as policy, but with a view to inform and stimulate wider debate.

Last updated: 
Wednesday, 26 September 2012