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Income Inequality and Progressive Income Taxation in China and India, 1986-2015

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  • Thomas Piketty
  • Nancy Qian

Abstract

This paper evaluates income tax reforms in China and India. The combination of fast income growth and under-indexed tax schedule in China implies the fraction of the Chinese population subject to income tax has increased from less than 0.1 percent in 1986 to about 20 percent in 2008, while it has stagnated around 2-3 percent in India. Chinese income tax revenues, as a share of GDP, increased from less than 0.1 percent in 1986 to about 1.5 percent in 2005 and 2.5 percent in 2008, while the constant adaptation of exemption levels and income brackets in India have caused them to stagnate around 0.5 percent of GDP. (JEL D31, H24, 015, 023, P23, P35)

Suggested Citation

  • Thomas Piketty & Nancy Qian, 2009. "Income Inequality and Progressive Income Taxation in China and India, 1986-2015," American Economic Journal: Applied Economics, American Economic Association, vol. 1(2), pages 53-63, April.
    • Handle: RePEc:aea:aejapp:v:1:y:2009:i:2:p:53-63
    Note: DOI: 10.1257/app.1.2.53
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    References listed on IDEAS

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    1. Thomas Piketty, 2003. "Income Inequality in France, 1901-1998," Journal of Political Economy, University of Chicago Press, vol. 111(5), pages 1004-1042, October.
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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • P23 - Economic Systems - - Socialist Systems and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
    • P35 - Economic Systems - - Socialist Institutions and Their Transitions - - - Public Finance

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    1. Income Inequality and Progressive Income Taxation in China and India, 1986-2015 (American Economic Journal: Applied Economics 2009) in ReplicationWiki

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