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Comparison of Taxes and Social Insurance Premium Burdens in Household Accounts

Author

Listed:
  • Taro Ohno

    (Associate Professor, Faculty of Economics, Management and Information Science, Onomichi City University; Senior Visiting Scholar, Policy Research Institute, Ministry of Finance)

  • Masahiko Nakazawa

    (Former Professor, Research Center for Advanced Policy Studies, Institute of Economic Research, Kyoto University)

  • Kazuaki Kikuta

    (Former Researcher, Policy Research Institute, Ministry of Finance)

  • Manabu Yamamoto

    (Former Researcher, Policy Research Institute, Ministry of Finance)

Abstract

This paper aims (1) to examine the characteristics of various statistics by comparing Indicated Values in response to questionnaires concerning various taxes and social insurance premiums and (2) to verify the validity of fitted values of the household tax burden (in terms of income and residential taxes) by comparing the Indicated Values with the Fitted Values. First, the comparison of Indicated Values in different statistics showed that Indicated Values of tax and insurance premiums were underestimated in the National Survey of Family Income and Expenditure and the Family Income and Expenditure Survey. In addition, as a result of the comparison between the Indicated Values and Fitted Values and the examination of the distribution of disparities between them, it was found that the mean disparity between the Indicated and Fitted Values of income and residential taxes was zero and the dispersion was around 3%. It was also confirmed that the disparity occurred frequently because of entry errors for the tax amount and that entry errors for values in questionnaires that affected the disparity included gbusiness income entry error h and gtax amount entry error due to errors in digits. h The implication of the examination is that Fitted Values obtained through microsimulation analysis are estimates with little bias regarding the macro values obtained through collection of data and that there is little margin of error. In that sense, these Fitted Values have sufficient precision to be used for the evaluation of policies.

Suggested Citation

  • Taro Ohno & Masahiko Nakazawa & Kazuaki Kikuta & Manabu Yamamoto, 2015. "Comparison of Taxes and Social Insurance Premium Burdens in Household Accounts," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 11(4), pages 547-572, September.
    • Handle: RePEc:mof:journl:ppr030c
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    Citations

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    Cited by:

    1. Masumi Kawade, 2018. "National Burden and Economic Inequality: Micro-Simulation Analysis," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 14(2), pages 245-266, March.
    2. Taro Ohno & Junpei Sakamaki & Daizo Kojima, 2020. "Factor decomposition of changes in the tax base for income tax," Discussion papers ron331, Policy Research Institute, Ministry of Finance Japan.
    3. Taro Ohno & Junpei Sakamaki & Author-Name:Daizo Kojima, 2021. "Effects of Deductions on the Tax Burden Reduction and the Redistribution of the Income and Resident Taxes," Discussion papers ron338, Policy Research Institute, Ministry of Finance Japan.
    4. Ohno, Taro & Sakamaki, Junpei & Kojima, Daizo & Imahori, Tomotsugu, 2021. "Effects of deductions on the tax burden reduction and the redistribution of the income and resident taxes," Japan and the World Economy, Elsevier, vol. 60(C).

    More about this item

    Keywords

    taxes; insurance premium; indicated values; fitted values; microsimulation analysis;
    All these keywords.

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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