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Effects Of Personal Income Tax On Income Distribution: Example From Bulgaria




This study utilizes the 1992 Bulgarian household budget survey to analyze the distribution of income and income tax burden. Results indicate that the country is characterized by low income inequality, though this is changing rapidly. The findings also show that the present income tax system is progressive and that the urban sector pays much more relative to its income. Despite a steeply graduated statutory tax rate schedule, effective progression is rather modest, indicating significant tax evasion. However, one must view the results of progressivity and urban bias cautiously. As in-kind income becomes monetized and as the economy becomes more market-oriented, both progressivity and urban/rural differences will wane over time. Copyright 1996 Western Economic Association International.

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  • FAREED M. A. HASSAN & ŽELJKO BOGETIC, 1996. "Effects Of Personal Income Tax On Income Distribution: Example From Bulgaria," Contemporary Economic Policy, Western Economic Association International, vol. 14(4), pages 17-28, October.
  • Handle: RePEc:bla:coecpo:v:14:y:1996:i:4:p:17-28

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    References listed on IDEAS

    1. Arnold C. Harberger, 1962. "The Incidence of the Corporation Income Tax," Journal of Political Economy, University of Chicago Press, vol. 70, pages 215-215.
    2. Huang, Yukon, 1976. "Distribution of the Tax Burden in Tanzania," Economic Journal, Royal Economic Society, vol. 86(341), pages 73-86, March.
    3. Deaton, Angus S & Muellbauer, John, 1986. "On Measuring Child Costs: With Applications to Poor Countries," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 720-744, August.
    4. Ravallion, M., 1992. "Poverty Comparisons - A Guide to Concepts and Methods," Papers 88, World Bank - Living Standards Measurement.
    5. Devarajan, Shantayanan & Fullerton, Don & Musgrave, Richard A., 1980. "Estimating the distribution of tax burdens : A comparison of different approaches," Journal of Public Economics, Elsevier, vol. 13(2), pages 155-182, April.
    6. Karageorgas, Dionysios, 1973. "The Distribution of Tax Burden by Income Groups in Greece," Economic Journal, Royal Economic Society, vol. 83(330), pages 436-448, June.
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    Cited by:

    1. Klugman, Jeni & Micklewright, John & Redmond, Gerry, 2002. "Poverty in the Transition: Social Expenditures and the Working-Age Poor," CEPR Discussion Papers 3389, C.E.P.R. Discussion Papers.
    2. Zeljko Bogetic & Fareed Hassan, 2005. "Personal Income Tax Reform and Revenue Potential in Transition," Public Economics 0510003, EconWPA.

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