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Progressivity and distributive impacts of personal income tax: the case of China and Brazil

Author

Listed:
  • Pedro Rossi
  • Ricardo Gonçalves
  • Ping Shang

Abstract

This paper aims to evaluate and compare the distributive impact of the personalincome tax (PIT) on individual’s income in Brazil and China by measuring the Gini Indexbefore and after this tax incidence. The paper also proposes a methodology for transposingthe PIT backets from one country to another. The results show that a more progressivescheme implemented by China, with more brackets and higher rates, does not guaranteereduction of inequality, due to the level of income exemption and to the incomes on whichthe marginal rates affect. Thus, it can be perceived that the PIT brackets of these twocountries deserves revisions if they seek to fulfill the distributive function. JEL Classification: E62; H24; N45; N46.

Suggested Citation

  • Pedro Rossi & Ricardo Gonçalves & Ping Shang, 2022. "Progressivity and distributive impacts of personal income tax: the case of China and Brazil," Brazilian Journal of Political Economy, Center of Political Economy, vol. 42(4), pages 998-1013.
    • Handle: RePEc:ekm:repojs:v:42:y:2022:i:4:p:998-1013:id:2375
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    More about this item

    Keywords

    Gini index; income distribution; personal income tax; tax progressivity;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • N45 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Asia including Middle East
    • N46 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Latin America; Caribbean

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