This paper introduces a new model of Australia’s tax and transfer system: Model of the Australian Tax and Transfer System (MATTS). MATTS is a suite of Stata commands that provide researchers with the ability to model individual tax and transfer policies.
The MATTS suite can be applied to a range of taxtransfer modelling problems and methodologies, and is freely available to anyone with an interest in tax-transfer research.
This paper presents a specific application in which MATTS is used to illustrate how Australia’s tax-transfer system augments the disposable incomes and effective marginal tax rates of single income support recipients. These simple examples illuminate some of the trade-offs involved in the design of means-tested tax-transfer systems.