Distribution of Average, Marginal and Participation Tax Rates among Czech Taxpayers: Results from a TAXBEN Model
Dušek, Libor; Kalíšková, Klára; Münich, Daniel
Year: 2013 Volume: 63 Issue: 6 Pages: 474-504
Abstract: We present empirical distributions of the average, marginal and participation tax rates on earnings across the population of Czech taxpayers under the current tax-and-benefit system. We quantify significant differences between the taxation of employees and the self-employed: the average tax rates on wage income and business income are 37.4% and 28.1%, respectively, even though the self-employed tend to have higher earnings. On average, employees and the self-employed face effective marginal tax rates of 46.4% and 30.9%, respectively. The tax system exhibits almost no progressivity—the top income decile earns 26.7% of total income and pays 26.7% of total taxes—despite the fact that it is designed to be progressive by providing generous tax credits. There are large dispersions in the tax rates for people with similar earnings.
JEL classification: H22, H24, D31
Keywords: TAXBEN models, average tax rates, marginal tax rates, participation tax rates, Czech Republic
RePEc: http://ideas.repec.org/a/fau/fauart/v63y2013i6p474-504.html
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