Tax policy questions may relate to specific problems, concerning perhaps the revenue implications of a particular tax, or they may involve an extensive analysis of the cost and redistributive effects of many taxes and transfer payments. This book is concerned with the ways in which tax policy design can be enhanced by the use of a behavioural tax microsimulation model capable of evaluating the effects of planned or actual tax reforms. An advantage of such a large-scale tax simulation model, which reflects the heterogeneity of the population and captures the details of the tax structure, is that it can examine detailed practical policy questions and can provide direct inputs into policy debates. After introducing behavioural models, the authors discuss the role of means testing, several hypothetical policy reforms, actual and proposed reforms and recent modelling developments.
Tax Policy Design and Behavioural Microsimulation Modelling will be of interest to academics and researchers of economics, econometrics and public finance. It will also be useful reading for policymakers responsible for the formulation of taxation.
Hielke Buddelmeyer, Research Fellow, John Creedy, The Truby Williams Professor of Economics and Guyonne Kalb, Associate Professor, University of Melbourne, Australia
Contents: Part I: Introduction 1. Microsimulation Modelling 2. Outline of the Book 3. Flattening the Rate Structure Part II: Hypothetical Policy Reforms 4. Reducing Taper Rates 5. Reducing Family Payment Taper Rate 6. Distributional Change and the Safety Net 7. Survey Reweighting for Population Ageing Part III: Actual and Proposed Reforms 8. The Australian New Tax System 9. Inflation and Bracket Creep 10. The 2004 Federal Budget 11. The Australian Labor Party's Tax and Family Benefits Package 12. Policy Reforms in New Zealand Part IV: Further Developments 13. Modelling Extensions References Index