The Canadian Income Taxation: Statistical Analysis and Parametric Estimates

48 Pages Posted: 20 May 2019

See all articles by Musab Kurnaz

Musab Kurnaz

University of North Carolina at Charlotte - The Belk College of Business Administration - Department of Economics

Terry Yip

McMaster University

Date Written: May 10, 2019

Abstract

Using the administrative tax return database from Canada, we report facts on the distribution of tax liabilities and the variation of average tax rates by family size and marital status and compare them with those of the US. We estimate parametric tax functions used in applied macroeconomic and public finance studies. Although these functions are good fits to the data, their residuals are significantly high at top income levels. We introduce a new parametric tax function which captures the top rates better compared to existing tax functions. The new specification can provide better quantitative analysis for studies on heterogeneous households.

Keywords: Income Taxation, Parametric Tax Functions, Heterogeneous Households

JEL Classification: E62, H24, H31

Suggested Citation

Kurnaz, Musab and Yip, Terry, The Canadian Income Taxation: Statistical Analysis and Parametric Estimates (May 10, 2019). Available at SSRN: https://ssrn.com/abstract=3386443 or http://dx.doi.org/10.2139/ssrn.3386443

Musab Kurnaz

University of North Carolina at Charlotte - The Belk College of Business Administration - Department of Economics ( email )

Charlotte, NC 28223
United States

HOME PAGE: http://https://sites.google.com/view/musabkurnaz

Terry Yip (Contact Author)

McMaster University ( email )

1280 Main Street West
Hamilton, Ontario L8S 4M4
Canada

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