Working paper

Effective marginal tax rates: the New Zealand case

1 May 2018
Description

Effective Marginal Tax Rates (EMTRs) reflect the interaction of the personal income tax scale, main benefits, and supplementary benefits. They show how a dollar increase in gross income translates to an increase in income in the hand (after taxation and the withdrawal of income-tested assistance). This paper presents an algebraic approach to estimating EMTRs in New Zealand. EMTR profiles are then illustrated with examples of hypothetical families. This paper also discusses the design of family and working tax credits in five liberal welfare states, including Australia and New Zealand, as these programmes have at times been suggested as key instruments in addressing the problems associated with high EMTRs (poverty traps).

Publication Details
Issue: 
TTPI Working Paper 7/2018
Language: 
License Type: 
All Rights Reserved
Published year only: 
2018
16
Share
Share
Subject Areas
Geographic Coverage
Advertisement
Advertisement