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Income Inequality and Progressive Income Taxation in China and India, 1986-2015

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  • Thomas Piketty

    (PJSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Nancy Qian

    (Brown University)

Abstract

This paper evaluates income tax reforms in China and India. The combination of fast income growth and under-indexed tax schedule in China implies the fraction of the Chinese population subject to income tax has increased from less than 0.1 percent in 1986 to about 20 percent in 2008, while it has stagnated around 2-3 percent in India. Chinese income tax revenues, as a share of GDP, increased from less than 0.1 percent in 1986 to about 1.5 percent in 2005 and 2.5 percent in 2008, while the constant adaptation of exemption levels and income brackets in India have caused them to stagnate around 0.5 percent of GDP.

Suggested Citation

  • Thomas Piketty & Nancy Qian, 2009. "Income Inequality and Progressive Income Taxation in China and India, 1986-2015," Post-Print halshs-00754381, HAL.
    • Handle: RePEc:hal:journl:halshs-00754381
    DOI: 10.1257/app.1.2.53
    Note: View the original document on HAL open archive server: https://pjse.hal.science/halshs-00754381v1
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    References listed on IDEAS

    as
    1. Martin Ravallion & Shaohua Chen, 1999. "When Economic Reform is Faster Then Statistical Reform: Measuring and Explaining Income Inequality in Rural China," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(1), pages 33-56, February.
    2. Thomas Piketty & Nancy Qian, 2009. "Income Inequality and Progressive Income Taxation in China and India, 1986-2015," American Economic Journal: Applied Economics, American Economic Association, vol. 1(2), pages 53-63, April.
    3. Angus Deaton, 2003. "Adjusted Indian Poverty Estimates for 1999-2000," Working Papers 200, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
    4. Thomas Piketty & Emmanuel Saez, 2003. "Income Inequality in the United States, 1913–1998," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(1), pages 1-41.
    5. Thomas Piketty, 2003. "Income Inequality in France, 1901-1998," Journal of Political Economy, University of Chicago Press, vol. 111(5), pages 1004-1042, October.
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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • P23 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
    • P35 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Public Finance

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