Marginal, Average and Related Effective Tax Rate concepts
(2005) Taxation, Economic Policy and the Economy — p. 17-39
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- Abstract
- (en) The main problem when carrying out an empirical study on international taxation is the selection of appropriate measures for the tax. A priori we could work with the statutory rates, but given the multiple provisions of the tax codes affecting the tax base, they do not represent a good approximation of the tax burden, implying usually an overestimation of the tax liabilities actually supported by the taxpayer. To overcome that complexity and to obtain a summary measure that can be comparable and usable in an econometric analysis, economists have developed a set of tools called effective tax rates. Furthermore, these measures are important for political debates. Several estimates have been constructed in order to assess the "true" effective tax rate. This contribution aims to overview those different approaches and to shed some light on their pros and cons. Finally it will question their meaning in a globalising world and their future in a EU possibly moving to Formulary Apportionment.
- Affiliations
Louvain School of Management Accounting & Finance
Citations
Gérard, M., & Ruiz, F. (2005). Marginal, Average and Related Effective Tax Rate concepts. In Kanniainen, V. and S. Kari (ed.), Taxation, Economic Policy and the Economy (p. p. 17-39). University of Tampere. https://hdl.handle.net/2078.5/90653