The way in which the government, through the tax and benefit system, affects individuals and companies is something of a mystery to most people. Over the last century, the number of taxes has mushroomed and the system is now so complex that few understand it fully. This in turn means that why people do things - work, invest, employ others - which are affected by tax remains something of a mystery. This project is concerned with the use of large amounts of information on households and companies in order to chart the effects of taxes and benefits. The researcher has constructed computer models which predict tax and benefit entitlement under the present system, and after any possible reforms. The researcher intends to use these both to describe the effects of the system and changes to it and to predict individual and company behaviour if things change. The researcher's work on the effects of taxes on individuals and households draws heavily on the government's Family Expenditure Survey. This work will be used to examine possible policy changes - to the tax treatment of husband and wife, for example - and has developed new indicators of welfare effects, measures of standard of living, labour supply effects and other responses. The work is continuing with the development of a new framework for tax incidence, examining the concept of progressivity and investigating the factors which have changed the income distribution over the last 15 years. The centre piece of the Corporation Tax project is a computerised model which uses published accounting information as a basis for simulating how much tax individual companies are liable to pay, under the present (and alternative) tax systems. In the present phase this model is being used to explore the incentives given to companies: - to distribute or retain profits; - to invest in different ways; and - to finance investment using shareholders' funds or by borrowing. The aim of the project is then to measure how far company behaviour is affected by these incentives. This award was commissioned by the Public Finance Consortium (award reference number B/02/25/0000)