This paper addresses the need for a measure of the uncertainty that is associated with the results calculated through tax policy behavioural microsimulation modelling. Deriving the analytical measure would be extremely complicated. Therefore, a simulated approach is proposed which generates a...

This publication is a manual for the use of the Melbourne Institute Tax and Transfer Simulator (MITTS). MITTS provides a tool for analysing policy changes. It allows us to examine the effect of a variety of policy changes on labour supply and income distribution for the Australian.

This paper uses the Melbourne Institute Tax and Transfer Simulator to examine the effects of the New Tax System introduced in Australia in July 2000. First the whole set of changes is studied and then some of its components are discussed separately. From the results it is clear that the change...

This paper illustrates the use of the Melbourne Institute Tax and Transfer Simulator (a behavioural microsimulation model) in examining the impact of two hypothetical policy changes to Family Payments as they were in the March 1998 tax and transfer system. The effects of the policy changes on...

This paper presents the results of two policy simulations for couples with and without children. The first policy involves a reduction of the highest withdrawal rate from 70 to 60 per cent. The second policy reduces all withdrawal rates of 70 and 50 per cent to 30 per cent. A comparison is made...

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 their own taper rates and thresholds. Considering a range of tax and benefit systems, particularly those having benefit taper rates...

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 their own taper rates and thresholds. Considering a tax and benefit system with benefit taper rates whereby some benefits are received by...

Recent studies have examined tax policy issues using labour supply models characterised by a discretised budget set. Microsimulation modelling using a discrete hours approach is probabilistic. This makes analysis of the distribution of income difficult as even for a small sample with a modest...

The distributional implications of an extreme hypothetical reform of the Australian tax-transfer system are examined using the Melbourne Institute Tax and Transfer Simulator. This simulation model predicts labour supply using a probabilistic discrete hours approach. The analysis of the...

This paper examines the computation of exact welfare measures in the context of labour supply models. It is suggested that the standard method of computing compensating and equivalent variations does not allow su.ciently for the nonlinearity of the budget constraint. An exact method is...