International Trends in Personal Income Tax: Some Aspects of Vertical;and Horizontal Equity
AbstractMoving from the observation of the two most important innovations in personal income tax experiences at the international level, the introduction of flat taxes or the flattening of existing taxes, and the introduction of dual income taxes or a movement towards duality, the paper considers the equity implications of such changes. It first compares a graduate rate tax with a flat one in terms of both vertical and horizontal equity. After a review of the existing literature, a simulation is presented on the effects of replacing the Italian personal income tax (Irpef) with a flat tax with the same revenue. It is shown that a flat tax with a 33% rate would produce a redistributive impact very close to that of Irpef, while being horizontally equitable in an equivalence scale framework. It is shown that the result of a better performance of a flat tax than a graduate rate tax in a horizontal equity perspective and within the class of constant relative scales is not sensitive to the choice of scale. In many respects the dual income tax can also represent an improvement on equity grounds if compared with the traditional personal income tax.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by SIE - Societa' Italiana degli Economisti (I) in its journal Rivista Italiana degli Economisti.
Volume (Year): 14 (2009)
Issue (Month): 1 (April)
Find related papers by JEL classification:
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (SIE).
If references are entirely missing, you can add them using this form.