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Comparative analysis of the effective income tax function : Empirical evidence using LIS data

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  • Comparative analysis of the effective income tax function
  • Lim, Byung In; Hyun, Jin Kwon
  • Luxembourg Income Study


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Title Comparative analysis of the effective income tax function
Similar Titles
Sub Title

Empirical evidence using LIS data

Material Type Reports
Author(English)

Lim, Byung In; Hyun, Jin Kwon

Publisher

[Luxembourg]:Luxembourg Income Study

Date 2004-01
Series Title; No LIS Working Paper Series / 369
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Subject Economy < Financial Policy
Economy < Economic Administration
Holding Luxembourg Income Study

Abstract

The effective income tax function is useful and practical methodology to analyze the relationship between income and tax amounts. It includes the measures of tax progressivity, the maximum effective tax rate, and horizontal inequity. We statistically estimated the effective income tax function using the seven countries out of LIS datasets and Korean data. We also estimated the R-S index and the Kakwani index so as to test the consistency among these indexes. Our empirical results give us several implications. Four different indexes of tax progressivity reflect different aspects about the progressivity, implying that it requires policy planners to evaluate the income tax system with alternatives. The estimated maximum effective tax rate is usually less than or very close to its maximum statutory marginal tax rate, except for Norway and Korea (The rest omitted)