This article presents the Taxipp model, a Microsimulation model of French compulsory levies, which enables the conventional simulation of counterfactual legislation – both past and present – using a representative sample of the French population. The model differs from standard static Microsimulation approaches in that it pays particular attention to the allocation of the high-income distribution and calibrates all the data against aggregated national accounts information. The model thus provides micro-level breakdowns of total compulsory levies, consistent with the macroeconomic approach to taxation presented by national accounts. It also enables detailed analyses of tax reforms at the top end of the income distribution, where public debate often focuses.
Such an exercise does, however, have its limitations. The first is the inevitable reliance on incidence assumptions, particularly for taxes levied nominally on firms; the lack of consensus on the tax incidence of corporation tax thus leads to significantly different results. The second limitation stems from contradictions between the various aggregated sources (national accounts, tax sources), which are difficult to reconcile. These limitations are not insurmountable; on the contrary, they open up numerous avenues for further research aimed at improving the alignment of micro and macro approaches to the analysis of socio-fiscal systems / tax-and-transfer systems.
