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Global Reform of Personal Income Taxation, 1981-2005: Evidence from 189 Countries

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Author Info
Sabirianova Peter, Klara () (Georgia State University)
Buttrick, Steve (Georgia State University)
Duncan, Denvil (Georgia State University)

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Abstract

In this paper we use a panel of 189 countries to describe the salient trends that have emerged in national personal income tax systems spanning the twenty five year period from 1981 to 2005. Using complete national income tax schedules, we calculate actual average and marginal tax rates at different income levels as well as time-varying measures of structural progressivity and complexity of national tax systems. We show that frequent alterations of tax structures have reduced tax rates at higher levels of income and diminished the overall progressivity and complexity of national tax systems; however, the degree of this change varies considerably across countries. We also find that the relationship between the tax rates and revenue is positive for high income countries; however, the strength of the relationship declines with weaker institutions and lower levels of economic development.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4228.

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Length: 54 pages
Date of creation: Jun 2009
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Handle: RePEc:iza:izadps:dp4228

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Related research
Keywords: personal income tax; marginal rate; average rate; tax complexity; progressivity; flat tax; revenue; global trends;

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Find related papers by JEL classification:
C8 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs
E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
H2 - Public Economics - - Taxation, Subsidies, and Revenue
H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
N10 - Economic History - - Macroeconomics and Monetary Economics; Growth and Fluctuations - - - General, International, or Comparative
O1 - Economic Development, Technological Change, and Growth - - Economic Development

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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.:
  1. Sicat, Gerardo P & Virmani, Arvind, 1988. "Personal Income Taxes in Developing Countries," World Bank Economic Review, Oxford University Press, vol. 2(1), pages 123-38, January.
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    Other versions:
  4. Young, H Peyton, 1990. "Progressive Taxation and Equal Sacrifice," American Economic Review, American Economic Association, vol. 80(1), pages 253-66, March. [Downloadable!] (restricted)
  5. Yuriy Gorodnichenko & Jorge Martinez-Vazquez & Klara Sabirianova Peter, 2007. "Myth and Reality of Flat Tax Reform: Micro Estimates of Tax Evasion Response and Welfare Effects in Russia," International Studies Program Working Paper Series, at AYSPS, GSU paper0720, International Studies Program, Andrew Young School of Policy Studies, Georgia State University. [Downloadable!]
    Other versions:
  6. Roy W. Bahl & Richard M. Bird, 2008. "Tax Policy in Developing Countries: Looking Back and Forward," Working Papers Series 13, Rotman Institute for International Business, Joseph L. Rotman School of Management, University of Toronto, revised May 2008. [Downloadable!]
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Full references

Cited by:
(explanations, 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.)

  1. Wayne Thirsk, 2008. "Tax Policy in Pakistan: An Assessment of Major Taxes and Options for Reform," International Studies Program Working Paper Series, at AYSPS, GSU paper0808, International Studies Program, Andrew Young School of Policy Studies, Georgia State University. [Downloadable!]
  2. Sabirianova Peter, Klara, 2009. "Income Tax Flattening: Does It Help to Reduce the Shadow Economy?," IZA Discussion Papers 4223, Institute for the Study of Labor (IZA). [Downloadable!]
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