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Principle Of Fairness In Regard To Personal Income Tax

Author

Listed:
  • Renata Peric

    (Faculty of Law, Josip Juraj Strossmayer University of Osijek, Republic of Croatia)

  • Emina Jerkovic

    (Faculty of Law, Josip Juraj Strossmayer University of Osijek, Republic of Croatia)

Abstract

Any tax that achieves the desired and anticipated economic impact may be considered fair. Croatian positive tax system is justified by the Constitution which states that everyone must participate in the settlement of public expenses in accordance with their capabilities. Accordingly, the tax system is based on the principles of fairness and equality, therefore taxation should be the least property limitation. Tax on personal income is the instrument of tax policy that with its inevitable fiscal objective has a much more important objective of a social naturealleviate regressivity of VAT. Most financial scholars, lawyers or economists, agree that the principle of fairness is tried to be put into practice just by applying progressive tax rates on income. In some counties of Eastern Europe though, a flat personal income tax system has been introduced, also in order to increase the level of fairness. Th us this paper analyses personal income tax system, by focusing on the different types of income, tax base, tax rates and tax credits. The other issue of taxation that is scrutinized is the formation of an optimal tax burden, which means a continuous balance searching. This procedure and the related arguments are presented in this paper.

Suggested Citation

  • Renata Peric & Emina Jerkovic, 2014. "Principle Of Fairness In Regard To Personal Income Tax," Interdisciplinary Management Research, Josip Juraj Strossmayer University of Osijek, Faculty of Economics, Croatia, vol. 10, pages 821-828.
    • Handle: RePEc:osi:journl:v:10:y:2014:p:821-828
    as

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    File URL: http://www.efos.hr/repec/osi/journl/PDF/InterdisciplinaryManagementResearchX/IMR10a62
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    References listed on IDEAS

    as
    1. Richard E. Wagner, 2007. "Fiscal Sociology and the Theory of Public Finance," Books, Edward Elgar Publishing, number 12713.
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    More about this item

    Keywords

    personal income tax; fairness; progressive tax rate; flat tax rate; tax burden;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • K10 - Law and Economics - - Basic Areas of Law - - - General (Constitutional Law)
    • K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law

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