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Are Jamaica’s Direct Taxes on Labor “Fair†?


  • James Alm

    (Georgia State University, Atlanta)

  • Sally Wallace

    (Georgia State University, Atlanta)


The Government of Jamaica imposes a variety of taxes on the earnings of labor. Jamaica’s direct taxes and charges on labor income include the pay-asyou-earn (PAYE) income tax and five payroll taxes. In total, these taxes generate nearly one-third of the total tax revenues of the government in fiscal year 2002-2003, with the PAYE itself responsible for more than one-fifth of total revenues. This article uses unique micro-level data to analyze the vertical and, especially, the horizontal equity of these taxes. The authors find that the taxes are generally progressive in their overall pattern of incidence but that they also introduce significant horizontal inequities due to their uneven coverage and their many special provisions.

Suggested Citation

  • James Alm & Sally Wallace, 2007. "Are Jamaica’s Direct Taxes on Labor “Fair†?," Public Finance Review, , vol. 35(1), pages 83-102, January.
  • Handle: RePEc:sae:pubfin:v:35:y:2007:i:1:p:83-102

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    Cited by:

    1. James Alm & Keith Finlay, 2013. "Who Benefits from Tax Evasion?," Economic Analysis and Policy, Elsevier, vol. 43(2), pages 139-154, September.
    2. James Alm, 2014. "Tax evasion, labor market effects, and income distribution," IZA World of Labor, Institute for the Study of Labor (IZA), pages 1-91, October.
    3. James Alm, 2017. "Is Economics Useful for Public Policy?," Working Papers 1702, Tulane University, Department of Economics.


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