Measuring the Effective Tax Burden of Lifetime Personal Income

Jan Vlachý

European Financial and Accounting Journal, 2015, vol. 2015, issue 3, 5-14

Abstract: This paper designs and tests a comprehensive model, solved by statistical simulation, which describes and quantifies the effect of the tax system and lifelong income characteristics on the effective tax burden of a population or its segment. In the present application the model is structured and calibrated to analyse the category of employed persons in the Czech Republic. The Czech tax and levy system is shown to be mildly progressive, with a steep digression for very high incomes. It is also shown how the initial income endowment, lifelong income volatility and the minimum wage level impact the structure of effective tax rates, as well as expected unemployment.

Keywords: Lifetime tax burden; Personal income; Statistical simulation (search for similar items in EconPapers)
JEL-codes: C51 H21 H24 J31 (search for similar items in EconPapers)
Date: 2015
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DOI: 10.18267/j.efaj.142

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