Skip to main content

Search the site by keyword

Effective Marginal Tax Rates: The New Zealand case

Cover Effective Marginal Tax Rates v2
Date published

1 May 2018

Download [1.3 MB PDF]

Effective Marginal Tax Rates (EMTRs) reflect the interaction of the personal income tax scale, main benefits, and supplementary benefits. They show how a dollar increase in gross income translates to an increase in income in the hand (after taxation and the withdrawal of income-tested assistance). This paper presents an algebraic approach to estimating EMTRs in New Zealand. EMTR profiles are then illustrated with examples of hypothetical families. This paper also discusses the design of family and working tax credits in five liberal welfare states, including Australia and New Zealand, as these programmes have at times been suggested as key instruments in addressing the problems associated with high EMTRs (poverty traps).

Also published as New Zealand Productivity Commission Working Paper 2018/01. ISBN:978-1-98-851909-8.

If you would like to access the background material - EMTR spreadsheet and Tax credit spreadsheet - please contact Patrick.Nolan@productivity.govt.nz.

Number  2018/01
JEL Codes  H24 - Personal Income, Other Non-business Taxes, Subsidies

Tags Finance and tax
Share

Publications

Filter publications by topic.

Please select (multi select)
Deliberate logo with the title of the report

Causal diagrams to support ‘a fair chance for all’

3 May 2023

The Deliberate Report contains causal diagrams we commissioned Deliberate to provide to help summarise the complex interactions and tensions that have been identified in our A Fair Chance for All inquiry.
An illustration of people traversing two mountain ranges viewed close-up under a magnifying glass
Frontier Firms follow-on review

1 May 2023

Front cover of the report
Frontier Firms follow-on review: detailed observations

1 May 2023

Four people transcending a steep mountain ridge helping each other
Working together: Re-focussing public accountability to achieve better lives

17 March 2023

Three large cranes at an industrial port pictured in a sunset
A New Zealand history of shocks

28 February 2023

Containers piled up at a port - economic resilience main image
Issues paper - Improving Economic Resilience

28 February 2023

Cover image of the report
A learning system for addressing persistent disadvantage

27 February 2023

A boy looking into binoculars publications cover
Summary of submissions on interim report

27 February 2023

Containers piled up at a port - economic resilience main image
Supply chains to the last bus stop on the planet

23 December 2022

Paper cover image high speed internet
Does high-speed internet boost exporting?

21 December 2022

Seven kids sprinting on a green field - fair chance for all inquiry main image
A fair chance for all - Interim report

30 September 2022

green New zealand map with iconic landmarks - A fair chance for all illustration
The benefits of reducing persistent disadvantage

29 September 2022

Te puna korero cover image children lined up
Te puna kōrero: Understanding persistent disadvantage in Aotearoa New Zealand

29 August 2022

Cover Migration firm level productivity Page 01 v2
Migration and firm-level productivity

18 July 2022

NZPC Colonisation Racism Wellbeing Final
Colonisation, Racism and Wellbeing

9 June 2022

IBTN 800 v2
Immigration by the numbers

31 May 2022

Cover v22
Planning for prosperity: Transparent and public immigration targets

30 May 2022

Taylor Fry
Data-led approaches to identifying skills shortages

29 May 2022

Cover v23
Case study: Construction industry and migration

28 May 2022

CS v2
Case study: Aged residential care

28 May 2022

Immigration fit for the future cover image - hands
Immigration - Fit for the future

1 April 2022

Seven kids running on a field - public feedback cover
A fair chance for all: Where should we focus?

1 December 2021

Cover v20
Together alone: A review of joined-up social services

14 November 2021

Civer Primer to New Zealands immigration system
Primer to New Zealand's immigration system

8 November 2021

Cover International migration to NZ historical themes and trends
International migration to New Zealand: Historical themes & trends

8 November 2021

Cover Impacts of immigration on the labour market and productivity
Impacts of immigration on the labour market and productivity

8 November 2021

Cover The wider wellbeing effects of immigration
The wider wellbeing effects of immigration

8 November 2021

Cover Immigration policy international perspectives
Immigration policy: International perspectives

8 November 2021

Cover International migration to NZ future opportunities and challenges
International migration to New Zealand: Future opportunities and challenges

8 November 2021

Haemata report on wananga with Maori cover
Wānanga feedback on the terms of reference

27 September 2021

Text Ferret report on public feedback Page 01
Consultation on the Terms of Reference

1 September 2021

PBTN cover
Productivity by the numbers: 2021

27 May 2021

NZTE Exporting challenges
Exporting challenges and responses of New Zealand firms

21 April 2021

Cover v19
Frontier firms: Four industry case studies

21 April 2021

NZIER Picking cherries 800
Picking cherries

20 April 2021

He Manukura 750 v3
He Manukura - Insights from Māori frontier firms

20 April 2021

NZPC Focused innovation policy 750
Focused innovation policy: Lessons from international experience

20 April 2021

An illustration of people traversing two mountain ranges
New Zealand firms: reaching for the frontier

1 April 2021

Front cover v2
Living on the edge: an anatomy of New Zealand's frontier firms

2 March 2021

Front cover
Benchmarking New Zealand's frontier firms

25 February 2021

Pages from The performance of Maori firms New Zealand Work Research Institute
The performance of Māori frontier firms: a strategic management approach

4 December 2020

Pages from The dairy sector in NZ TDB Advisory
The dairy sector in New Zealand: extending the boundaries

4 December 2020

Cover v18
Migration and New Zealand's frontier firms

30 November 2020

Cover 350
New Zealand boards and frontier firms

4 September 2020

Cover v17
Firm dynamics and productivity growth

31 August 2020

Cover v16
A cost benefit analysis of 5 extra days at COVID-19 alert level 4

7 August 2020

How does monetary policy affect welfare
How does monetary policy affect welfare?

30 June 2020

Pages from Frontier firms David Skilling
Frontier firms: an international small advanced economy perspective

28 May 2020

TFP2
Trust and total factor productivity

28 April 2020

Cover v15
Job-to-job transitions and the regional job ladder

18 March 2020

Cover 1001
New Zealanders' attitudes towards robots and AI

9 March 2020

Cover 600
Local government insights

19 February 2020

Cover v12
Scope and funding of local government

30 November 2019

Cover New jobs old jobs
New jobs, old jobs

16 October 2019

Cover Page
Competition and productivity

16 August 2019

PBN Cover
Productivity by the numbers: 2019

7 June 2019

Sapere Analysis of Local Government Cost Drivers publication cover
Analysis of local government cost drivers

16 May 2019

26 local government funding hero illustration in green
Local government funding and finance – Accounting and financial management issues

1 May 2019

Cover firm dynamics 2
Firm dynamics and job creation: revisiting the perpetual motion machine

14 February 2019

Growing digital Infographic summary
Growing the digital economy in Australia and New Zealand

14 February 2019

Cover Innovation in Primary Health v3
Innovation in primary healthcare

1 February 2019

Cover
The tax-benefit interface

1 February 2019

Productivity in developed Cover
Productivity in developed Asia-Pacific: A firm-level perspective

24 December 2018

Cover A Note on Construction Worker
A Note on Construction Worker Migration to New Zealand 1962-2018

14 November 2018

Cover v2
Assessing and enhancing New Zealand's productivity

1 August 2018

Cover Getting under the hood
Insights from recent firm-level productivity research

5 July 2018

Cover Can the kiwi fly
Can the kiwi fly? Achieving productivity lift off in New Zealand

28 June 2018

Cover Effective Marginal Tax Rates v2
Effective Marginal Tax Rates: The New Zealand case

1 May 2018

Cover The Labour Income Share v2
The Labour Income Share in New Zealand: An Update

20 March 2018

Cover Absorptive capacity
Absorptive Capacity in NZ Firms: measurement and importance

22 February 2018

Cover v3
Residential construction and population growth in New Zealand: 1996-2016

1 January 2018

The impact of RD grants on the performance of NZ firms
The impact of R&D grants on the performance of New Zealand firms

23 November 2017

Cover Innovation and the performance of New Zealand firms
Innovation and the performance of New Zealand firms

23 November 2017

Cover Tertiary Education v2
Estimating quality-adjusted productivity in tertiary education

1 November 2017

Cover Examining the UK Climate Change Act 2008 0
Examining the UK Climate Change Act 2008

29 September 2017

Cover Public Sector Productivity School Quality Adjustment v3
Quality adjusting sector-level data on New Zealand schools

1 June 2017

Social Sector
Social sector productivity: a task perspective

1 June 2017

Cover Explaining ethnic disparities
Explaining ethnic disparities in bachelor's qualifications

20 February 2017

Cover Geographic proximity and productivity convergence.jpg
Geographic proximity and productivity convergence across New Zealand firms

16 December 2016

Servification
The servicification of trade

16 December 2016

Cover NZ productivity potential v3
Achieving New Zealand's productivity potential

28 November 2016

Cover Subjective wellbeing
Subjective wellbeing in New Zealand: Some recent evidence

9 May 2016

Cover What can complexity theory tell us about urban planning v2
What can complexity theory tell us about urban planning?

27 April 2016

Cover History of tertiary education reforms
History of tertiary education reforms in New Zealand

12 January 2016

Cover productivity hub symposium
Productivity Symposium transcript

1 December 2015

Cover v13
Do New Zealand firms catch up to the domestic productivity frontier?

30 June 2015

Cover MOtu
The impact of R&D subsidy on innovation

29 June 2015

Cover innovatiove
Measuring the innovative activity of New Zealand firms

29 June 2015

Cover NZ prod
New Zealand’s productivity growth

29 May 2015

Firm cover
Firm dynamics and job creation in New Zealand

29 May 2015

Cover v11
The labour income share in New Zealand

5 February 2015

Cover v9
Reform of the UK’s decumulation market

21 January 2015

Cover v6
New Zealand's international trade in services

5 June 2014

Cover v7
Trade over distance for New Zealand firms

5 June 2014

Cover v8
Structural change and New Zealand’s productivity performance

5 June 2014

Infographic How high are New Zealand prices v2
Explaining international differences in the prices of tradables and non-tradables

21 May 2014

Infographic v2
An international perspective on the New Zealand productivity paradox

16 April 2014

Cover v5
The prices of goods and services in New Zealand

1 March 2014

Cover NZ Aus industry level
Investigating New Zealand-Australia productivity differences

19 December 2013

Pages from NZPC Conway Meehan Productivity by the Numbers
Productivity by the numbers: the New Zealand experience

20 September 2013

Cover v4
Housing affordability in New Zealand

16 July 2013

Cover AUK
The effect of Auckland's Metropolitan Urban Limit on land prices

28 March 2013

Cover aus nz v2
How integrated are the Australian and New Zealand economies?

28 March 2013

Load more publications