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Format: 1 online resource (78 pages)

ISBN: 1-280-00601-3 , 9786610006014 , 92-64-19562-9

Series Statement: OECD Tax Policy Studies, no.5

Content: Tax ratios derived using aggregate data - also known as implicit tax rates - have attracted increased attention from policymakers and analysts as a possible approach to measuring average effective tax rates on labour, capital, households, corporations and consumption. This study reports on conceptual and practical difficulties encountered in the measurement of average tax rates using aggregate data (e.g., National Accounts and Revenue Statistics). To examine the robustness of previous studies on tax ratios, the existing indicators are re-calculated for an expanded sample of countries and over an extended time period, and the results are compared with those derived under an alternative suggested methodology. The work finds that most tax ratios reported in the literature suffer from a number of flaws, and highlights measurement problems that are much broader than discussed in the literature. The identification of substantial shortcomings with these measures is useful, given the interest in their use for policy purposes. The message of this study is that policymakers should be aware of the measurement problems underlying average tax rates based on aggregate data, should they be fielded to shape public policy debates.

Note: Intro -- Foreword -- Contents -- Executive Summary -- Figure 1. Labour income tax ratio: our data vs. Mendoza et al. (1997) -- Figure 2. Capital income tax ratio: our data vs. Mendoza et al. (1997) -- Figure 3. Corporate income tax ratio: our data vs. Mendoza et al. (1997) -- Figure 4. Composition tax ratio: our data vs. Mendoza et al. (1997) -- 1. Introduction -- 2. Tax Ratios in the Literature: An Overview -- Table 1. Overview of published tax ratios -- Table 2. Scope of published tax ratios -- 3. Tax Ratios: Methodology of the Mendoza et al. (1994) Study -- Table 3. Tax ratios: Mendoza et al. (1994) -- 4. Tax Ratios: A Comparison -- Table 4. Classification of OECD National Accounts and Revenue Statistics -- Table 5. Tax ratios: Mendoza et al. (1994) versus other studies -- 4.1. Personal Income Tax Ratios -- 4.2. Labour Income Tax Ratios -- Table 6. Quotas for income tax split presently used in the Structures of the Taxation Systems -- 4.3. Capital Income Tax Ratios -- 4.4. Corporate Income Tax Ratios -- 4.5. Consumption Tax Ratios -- 5. Methodological and Practical Problems -- 5.1. General Comments -- 5.2. Fundamental Issues -- Table 7. Overview of Tax Structures in OECD countries, 1998 -- Table 8. Effects of transaction with the rest of the world on tax ratios -- 5.3. Smaller Problems -- 6. Suggestions for Improvement -- Table 9. Tax ratios: suggested definitions -- 7. New Calculations of Tax Ratios -- 7.1. The Mendoza et al. (1994) Methodology -- 7.2. New Calculations Following our Suggested Methodology -- 7.3. Discussion -- 8. Concluding Remarks -- A. Data -- Table 10. Data problems -- B. Remarks to the Calculations Underlying the Results in Section 7 -- B.1. Country Reports -- B.1.1. Austria -- B.1.2. Belgium -- B.1.3. Finland -- B.1.4. France -- B.1.5. Germany -- B.1.6. Greece -- B.1.7. Italy -- B.1.8. Luxembourg. , B.1.9. The Netherlands -- B.1.10. Portugal -- B.1.11. Spain -- B.1.12. Sweden -- B.1.13. United Kingdom -- Table 11: Labour income tax ratios (Mendoza et al. (1997)) % -- Table 12: Capital income tax ratios (Mendoza et al. (1997)) % -- Table 13: Consumption tax ratios (Mendoza et al. (1997)) % -- Table 14: Personal income tax ratios (own calculations, based on Mendoza et al. (1994)) % -- Table 15: Labour income tax ratios (own calculations, based on Mendoza et al. (1994)) % -- Table 16: Capital income tax ratios (own calculations, based on Mendoza et al. (1994)) % -- Table 17: Corporate income tax ratios (own calculations, based on Mendoza et al. (1994)) % -- Table 18: Consumption tax ratios (own calculations, based on Mendoza et al. (1994)) % -- Table 19: Labour income tax ratios (own calculations, based on our approach) % -- Table 20: Capital income tax ratios (own calculations, based on our approach) % -- Table 21: Corporate income tax ratios (own calculations, based on our approach) % -- Table 22: Consumption tax ratios (own calculations, based on our approach) % -- Notes -- References. , English

Language: English