Modeling of Choosing the Parameters of the Income Tax Schedule

Abstract

This article explores the problems of practical usage of the model of construction of the average income tax rates schedule. Restrictions on choice of input parameters of the model are defined. A special attention is given to the possible method of choice of elasticity parameters for a model tax schedule.
The received outcomes allow reduce the problem of choice of the marginal income tax rates and the level of the tax schedule to a problem of choice of input parameters of considered model. Thus the number of the indicated parameters is less than in the case of a direct choice of the marginal tax rates schedule.

Keywords:

progressive income taxation, marginal and average tax rates, model of construction of average rates income tax schedule, incomes distribution function, input parameters of model