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Dual Income Taxation: A Promising Path to Tax Reform for Developing Countries

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Author Info

  • Bird, Richard M.
  • Zolt, Eric M.

Abstract

The dual income tax combines a progressive tax on labor income and a lower flat tax on income from capital. Unlike flat tax systems, a dual income tax provides developing countries greater flexibility in addressing tax competition while retaining progressivity. Countries could use the move to a dual income tax system not just as an opportunity to rationalize the taxation of income from business operations and investment but also as a vehicle for broader reform of their tax systems.

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Bibliographic Info

Article provided by Elsevier in its journal World Development.

Volume (Year): 39 (2011)
Issue (Month): 10 ()
Pages: 1691-1703

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Handle: RePEc:eee:wdevel:v:39:y:2011:i:10:p:1691-1703

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Web page: http://www.elsevier.com/locate/worlddev

Related research

Keywords: income tax; tax reform; tax competition; progressivity;

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Cited by:
  1. Richard M. Bird & Eric M. Zolt, 2013. "Taxation and Inequality in the Americas: Changing the Fiscal Contract?," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1315, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.

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