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Average Marginal Income Tax Rates for New Zealand, 1907-2009

Author

Listed:
  • Fiona McAlister
  • Debasis Bandyopadhyay
  • Robert Barro
  • Jeremy Couchman
  • Norman Gemmell
  • Gordon Liao

    (The Treasury)

Abstract

Estimates of marginal tax rates (MTRs) faced by individual economic agents, and for various ggregates 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.

Suggested Citation

  • Fiona McAlister & Debasis Bandyopadhyay & Robert Barro & Jeremy Couchman & Norman Gemmell & Gordon Liao, 2012. "Average Marginal Income Tax Rates for New Zealand, 1907-2009," Treasury Working Paper Series 12/04, New Zealand Treasury.
    • Handle: RePEc:nzt:nztwps:12/04
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    File URL: https://treasury.govt.nz/sites/default/files/2012-09/twp12-04.pdf
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    References listed on IDEAS

    as
    1. Barro, Robert J & Sahasakul, Chaipat, 1986. "Average Marginal Tax Rates from Social Security and the Individual Income Tax," The Journal of Business, University of Chicago Press, vol. 59(4), pages 555-566, October.
    2. Valerie A. Ramey, 2011. "Identifying Government Spending Shocks: It's all in the Timing," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(1), pages 1-50.
    3. Norman Gemmell & Richard Kneller & Ismael Sanz, 2011. "The Timing and Persistence of Fiscal Policy Impacts on Growth: Evidence from OECD Countries," Economic Journal, Royal Economic Society, vol. 121(550), pages 33-58, February.
    4. Barro, Robert J & Sahasakul, Chaipat, 1983. "Measuring the Average Marginal Tax Rate from the Individual Income Tax," The Journal of Business, University of Chicago Press, vol. 56(4), pages 419-452, October.
    5. Roel Beetsma & Massimo Giuliodori, 2011. "The Effects of Government Purchases Shocks: Review and Estimates for the EU," Economic Journal, Royal Economic Society, vol. 121(550), pages 4-32, February.
    6. Robert J. Barro & Charles J. Redlick, 2011. "Macroeconomic Effects From Government Purchases and Taxes," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(1), pages 51-102.
    7. Barro, Robert J. & Sahasakul, Chaipat, 1983. "Measuring the Average Marginal Tax Rates from Social Security and the Individual Income Tax," Working Papers 29, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    8. Angelopoulos, Konstantinos & Economides, George & Kammas, Pantelis, 2007. "Tax-spending policies and economic growth: Theoretical predictions and evidence from the OECD," European Journal of Political Economy, Elsevier, vol. 23(4), pages 885-902, December.
    9. Jens Matthias Arnold & Bert Brys & Christopher Heady & Åsa Johansson & Cyrille Schwellnus & Laura Vartia, 2011. "Tax Policy for Economic Recovery and Growth," Economic Journal, Royal Economic Society, vol. 121(550), pages 59-80, February.
    10. Lee, Young & Gordon, Roger H., 2005. "Tax structure and economic growth," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 1027-1043, June.
    11. Romero-Ávila, Diego & Strauch, Rolf, 2008. "Public finances and long-term growth in Europe: Evidence from a panel data analysis," European Journal of Political Economy, Elsevier, vol. 24(1), pages 172-191, March.
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    Citations

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    Cited by:

    1. Creedy, John & Gemmell, Norman, 2013. "Can Automatic Tax Increases Pay for the Public Spending Effects of Population Ageing in New Zealand?," Working Paper Series 18777, Victoria University of Wellington, Chair in Public Finance.
    2. John Creedy & Norman Gemmell, 2014. "Can fiscal drag pay for the public spending effects of population ageing in New Zealand?," New Zealand Economic Papers, Taylor & Francis Journals, vol. 48(2), pages 183-195, August.
    3. Fernando Di Nicola & Melisso Boschi & Giorgio Mongelli, 2017. "Effective marginal and average tax rates in the 2017 Italian tax-benefit system," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2017(3), pages 67-90.
    4. Fernando Di Nicola & Melisso Boschi & Giorgio Mongelli, 2017. "Effective marginal and average tax rates in the 2017 Italian tax-benefit system," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2017(3), pages 67-90.

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    More about this item

    Keywords

    Average marginal tax rates; New Zealand;

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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