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Average Marginal Income Tax Rates for New Zealand, 1907-2009 WP 12/04

Publication Details

  • Average Marginal Income Tax Rates for New Zealand, 1907-2009
  • Published: 26 Sep 2012
  • Status: Current
  • Authors: McAlister, Fiona; Bandyopadhyay, Debasis; Barro, Robert; Couchman, Jeremy; Gemmell, Norman; Liao, Gordon
  • Pages: (2),iii,39
  • ISBN: 978-0-478-39672-0 (Online)
  • Ref. No: WP 12/04
  • Pub. type: Working Papers
  • Responsible units: Tax Strategy
  • Copyright: © Crown Copyright
  • JEL Classification: H24; H31
 

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

Published 26 Sep 2012
Page updated 26 Sep 2012

Authors: Fiona McAlister, Debasis Bandyopadhyay, Robert Barro, Jeremy Couchman, Norman Gemmell and Gordon Liao

Abstract

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

This Working Paper is available in Adobe PDF and HTML. Using PDF Files

Contents

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Executive Summary

1 Introduction

2 Personal Income Taxation

3 New Zealand Income Distribution Data

4 Calculating AMTRs – Methodology

5 Income-weighted AMTRs: 1907-2009

6 Conclusions

References

Data Sources

Appendix 1: The NZ ‘Multi-Slope’ Income Tax System 1914-1939

Appendix 2: Income Distribution Data

Appendix 3: Exemptions Data

Appendix 4: Estimating Non-filers' Incomes

twp12-04.pdf (910 KB) pp. 1–39

Acknowledgements

We are grateful to: Sandra Watson of the Inland Revenue department for undertaking the tax rate calculations for 1981-2009, using IR unit record data; University of Auckland for their contribution via the Research Grant #3627069; and Keith Rankin of the University of Auckland for valuable discussions on the history of the NZ tax system.

Disclaimer

The views, opinions, findings, and conclusions or recommendations expressed in this Working Paper are strictly those of the author(s). They do not necessarily reflect the views of the New Zealand Treasury or the New Zealand Government. The New Zealand Treasury and the New Zealand Government take no responsibility for any errors or omissions in, or for the correctness of, the information contained in these working papers. The paper is presented not as policy, but with a view to inform and stimulate wider debate.

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