This type of static analysis does not take into account behavioural (for example, in the labour supply or in taxpayers’ evasion or avoidance strategies) or life-cycle or general equilibrium effects. Therefore, it does not consider the reaction functions of economic agents with regard to the introduction or modification of taxes and transfers. However, it is well known that income data from household surveys are often underestimated owing to various factors, including the failure to capture the incomes of top earners, item or unit non-response and underreporting of income (particularly at the top end of the income distribution scale).