IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Individual Income Taxation: Income, Consumption, or Dual?

Listed author(s):
  • Robin Boadway

    (Queen's University, Canada and CEDifo)

In the course of our study of individual tax systems, we necessarily touch on all of the above issues. Before doing so, it is worth emphasizing that the personal tax is one of three main broad-based taxes whose bases overlap to a considerable extent, the others being the VAT and payroll taxes. The bases of the latter two taxes are roughly similar in present value terms. They differ only to the extent that an individual’s net inheritances (the present value of inheritances less bequests) and other net transfers are positive. Both are essentially taxes that distort the labor-leisure choice (including the participation decision), at least to the extent that payroll taxes are not used to finance actuarially fair transfer programs. Thus, if payroll taxes finance the equivalent of fully contributory pension funds, they are unlikely to impose a distortion on the labor-leisure choice. In practice, payroll taxes are usually not earmarked to individual accounts so this is not an issue. Since for most taxpayers the bulk of taxable income consists of labor income, there is considerable overlap among the three bases. The main difference is that individual taxes might include elements of capital income in the base (for which the overlap might be with wealth or property taxes). That being the case, the overall tax rate faced by individuals includes all three tax rates.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University in its series International Center for Public Policy Working Paper Series, at AYSPS, GSU with number paper1015.

in new window

Length: 46 pages
Date of creation: 01 May 2010
Handle: RePEc:ays:ispwps:paper1015
Contact details of provider: Phone: 404-413-0235
Fax: 404-413-0244
Web page:

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ays:ispwps:paper1015. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Paul Benson)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.