OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Marginal Effective Tax Rates on Physical, Human and R&D Capital

This paper presents marginal effective tax rates (METRs) for a number of physical and intangible assets and for a number of funding sources. The assets include machinery, buildings, inventories, investments in short-lived R&D (that is, investments whose returns last only a few years) and in long-lived R&D (whose returns last many years). Two human capital assets are included -- firm-sponsored training and household-sponsored tertiary education. The calculations incorporate parameters from both the personal and corporate tax codes. They are performed for the “top-bracket” taxpayer and for the “average production worker” and cover between 15 and 22 countries, depending on data availability. The OECD has already used the King-Fullerton method to calculate METRs for physical capital (OECD, 1991) and this paper updates these calculations using established practices. As the method has not yet been applied to household-sponsored human capital, the paper describes the extension to this ...


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