Development of Microsimulation and Burden Structure of Personal Income Taxation

Abstract

　As research in the field of taxation and social security increasingly uses household microdata, an increasing number of studies are dealing with a technique known as microsimulation. This method estimates the amount of taxes and benefits by applying the actual system to information on household family structure and income, and plays a variety of roles, including (1) estimation of policy changes, (2) calculation of marginal tax rates, (3) complementing of samples, (4) resolution of seasonality problems, and (5) extraction of contributions from system changes. This paper first summarizes the development of microsimulation and research results on personal income taxation in Japan. We also use a microsimulation model based on household microdata (1989-2019) to clarify the actual situation regarding the burden structure of personal income taxation in Japan while taking advantage of the diversity of this method.