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Flat Tax, the solution?

Author

Listed:
  • Flamino Viola

    (CEFAGE e Universidade de Évora)

  • Margarida Saraiva

    (CEFAGE e Universidade de Évora)

Abstract

This article presents a comparative study of the tax burden of the Portuguese tax system, with the application of progressive rates and proportional rates (flat tax) in determining personal income tax. For this work we chose case study methodology, specifically comparative case study methodology, because it is understood to be the one best suited to the complexity of the subject under review. The results demonstrate that flat tax respects the constitutional principle of progressive tax rates; Portuguese taxpayers with lower (higher) incomes pay less (more) taxes on personal income compared to the flat tax; that the existence of progressive rates does not mean Portuguese taxpayers benefit; and that the flat tax can achieve higher tax revenue than the IRS (Individual Income Tax) in force. Although adoption of the flat tax is possible, it is not believed this adoption would be feasible for political reasons.

Suggested Citation

  • Flamino Viola & Margarida Saraiva, 2015. "Flat Tax, the solution?," CEFAGE-UE Working Papers 2015_07, University of Evora, CEFAGE-UE (Portugal).
    • Handle: RePEc:cfe:wpcefa:2015_07
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    Individual income tax; Flat tax; Progressive tax; Proportional tax; Portuguese fiscal economy.;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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