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What makes personal income taxes progressive? The case of Belgium

Author

Listed:
  • André Decoster
  • Isabelle Standaert
  • Christian Valenduc
  • Guy Van Camp

Abstract

In this paper we investigate the progressivity impact of various components of the Belgian personal income tax system, before and after a major reform of this system. The reform reduced the top tax rates, broadened the tax base and increased tax credits. We show that, contrary to the opinion, commonly expressed in public debates, the reform did not reduce aggregate liability progression of the system and that the rate structure is relatively unimportant in explaining progressivity.

Suggested Citation

  • André Decoster & Isabelle Standaert & Christian Valenduc & Guy Van Camp, 2002. "What makes personal income taxes progressive? The case of Belgium," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 45(3), pages 91-112.
  • Handle: RePEc:bxr:bxrceb:y:2002:v:45:i:3:p:91-112
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    References listed on IDEAS

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    7. André Decoster & Guy Van Camp, 1998. "The unit of analysis in microsimulation models for personal income taxes: fiscal unit or household?," Working Papers Department of Economics ces9833, KU Leuven, Faculty of Economics and Business, Department of Economics.
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    Cited by:

    1. Vaqar Ahmed & Cathal O'Donoghue, 2009. "Redistributive Effect of Personal Income Taxation in Pakistan," Working Papers 0143, National University of Ireland Galway, Department of Economics, revised 2009.
    2. André DECOSTER & Guy VAN CAMP, 2000. "Redistributive Effects of the Shift from Personal Income Taxes to Indirect Taxes: Belgium 1988-1993," Working Papers Department of Economics ces0007, KU Leuven, Faculty of Economics and Business, Department of Economics.
    3. Jorge Onrubia & Fidel Picos-Sánchez & María Carmen Rodado, 2014. "Rethinking the Pfähler–Lambert decomposition to analyse real-world personal income taxes," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(4), pages 796-812, August.

    More about this item

    Keywords

    Personal income tax; Tax reform; Progressivity;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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