ABSTRACT
The primary objective of this article is to explore how the redistributive effects of tax rate change when using the fixed taxable income approach – where tax rates for each year in a period are applied to taxable income for a base year to calculate rate effects – instead of using an existing procedure to compute the rate effects. Standard rate effects are found to differ considerably from those calculated using the fixed taxable income approach in terms of both level and longitudinal trend.
Disclosure statement
No potential conflict of interest was reported by the author.
Notes
1 The re-ranking effect is expressed as
2 For more details about the calculation of income and taxable income, see Miyazaki and Kitamura. (Citation2015).