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Transfer Simulator (transfer + simulator)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting100%

Selected Abstracts

Abolishing the Tax-Free Threshold in Australia: Simulating Alternative Reforms,

FISCAL STUDIES, Issue 2 2009
John Creedy
H24; H31 Abstract This paper examines the role of the tax-free income tax threshold in a complex tax and transfer system consisting of a range of taxes and benefits, each with its own taper rates and thresholds. Considering a tax and benefit system with benefit taper rates whereby some benefits are received by income groups other than those at the bottom of the distribution, it is suggested that a tax-free threshold is not a necessary requirement to achieve redistribution. Four alternative policy changes, each involving the elimination of the tax-free threshold in Australia and designed to achieve approximate revenue neutrality, were examined using the Melbourne Institute Tax and Transfer Simulator. A range of implications were examined, including labour supply responses to tax changes and the effects of policy changes on inequality and social welfare. The results demonstrate that it is possible to eliminate the tax-free threshold under approximate overall revenue and distribution neutrality, but that it is impossible to improve labour supply incentives at the same time. In order to achieve improved incentives, either revenue or distribution neutrality has to be sacrificed. [source]

Flattening the Effective Marginal Tax Rate Structure in Australia: Policy Simulations Using the Melbourne Institute Tax and Transfer Simulator

THE AUSTRALIAN ECONOMIC REVIEW, Issue 2 2003
John Creedy
This article uses the Melbourne Institute Tax and Transfer Simulator to examine the effects of a reduction in the means-tested benefit taper, or withdrawal, rates in Australia to 30 per cent. That is, all taper rates of 50 per cent and 70 per cent in the March 1998 benefit system are reduced to 30 per cent, while leaving all basic benefit levels unchanged. This change is therefore expected to ,flatten' the tax structure by reducing the high marginal tax rates applying to those with relatively low incomes and increasing the marginal tax rates of medium incomes. Simulations in which all individuals are assumed to remain at their pre-reform labour supply levels are compared with behavioural simulations in which the majority of individuals are free to adjust the number of hours worked. The results reflect only the supply side of the labour market. The database used is the 1997-98 Survey of Income and Housing Costs, so that weekly incomes are based on the financial year 1997-98. The comparison shows that, for sole parents, accounting for behavioural effects of the reform results in a lower estimated expenditure for government, whereas for couples, accounting for behavioural effects results in a higher estimated expenditure. [source]

Simulating the Behavioural Effects of Welfare Reforms Among Sole Parents in Australia

THE ECONOMIC RECORD, Issue 242 2002
Alan Duncan
This paper derives and estimates an econometric model of labour supply among sole parents in Australia, using modelling techniques which treat the labour supply decision as a utility maximising choice between a given number of discrete states. The model is then used to look at the likely effects of actual and hypothetical welfare policy reforms. Model estimates are based upon net incomes generated by the Melbourne Institute Tax and Transfer Simulator (MITTS), developed at the Melbourne Institute in collaboration with the Department of Family and Community Services (FaCS). [source]