A Simulation Method to Measure the Tax Burden on Highly Skilled Manpower

Christina Elschner and Robert Schwager

No 04-59, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: A model is presented for simulating the tax burden on highly skilled manpower. The effective average tax rate, defined as the relative wedge between total remuneration and disposable income, is computed. Income and payroll taxes and social security contributions not yielding an equivalent benefit are taken into account. The compensation package consists of cash payments and old-age provision. To integrate retirement benefits and their tax treatment, an inter-temporal approach is used. The results indicate that Germany and France have higher tax burdens than the UK and the USA, that Germany grants the strongest tax relief for families, and that occupational pension plans are favourable in all countries.

Keywords: personal income tax; highly skilled employees; effective tax burden; pensions (search for similar items in EconPapers)
JEL-codes: H21 H24 H55 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:2349

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