1887

OECD Taxation Working Papers

Working papers from the Centre for Tax Policy and Administration of the OECD that cover the full range of the Centre’s work on taxation with the main focus on tax policy related issues.

English, French

The potential of tax microdata for tax policy

This paper explores one distinctive form of the ‘big data’ of economics – individual tax record microdata – and its potential for tax policy analysis. The paper draws on OECD collaborations with Slovenia and Ireland in 2018 where tax microdata was used.

Most empirical economics is based on survey data. However, the current trend of low and falling response rates has placed a question mark over the future value of survey practice generally. By contrast, this paper discusses the increasing use of tax microdata in economic research and the new types of policy analysis made possible by it.

In the future, best-practice tax policy analysis is likely to combine tax microdata with survey and national account data. The advantages of these combined data will be important for policymakers to understand and address future policy challenges including protecting tax revenues in an era of population ageing and supporting fairness given the changing nature of economic mobility.

English

Keywords: big data, income inequality, income distributions, economic mobility, tax administration data, tax policy analysis
JEL: D31: Microeconomics / Distribution / Personal Income, Wealth, and Their Distributions; H24: Public Economics / Taxation, Subsidies, and Revenue / Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes; C55: Mathematical and Quantitative Methods / Econometric Modeling / Large Data Sets: Modeling and Analysis
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