Global Reform of Personal Income Taxation, 1981-2005: Evidence from 189 Countries
Klara Sabirianova Peter
University of North Carolina - Chapel Hill; Institute for the Study of Labor (IZA); Centre for Economic Policy Research (CEPR)
Georgia State University - Department of Economics
IZA Discussion Paper No. 4228
In this paper we use a panel of 189 countries to describe the salient trends that have emerged in national personal income tax systems spanning the twenty five year period from 1981 to 2005. Using complete national income tax schedules, we calculate actual average and marginal tax rates at different income levels as well as time-varying measures of structural progressivity and complexity of national tax systems. We show that frequent alterations of tax structures have reduced tax rates at higher levels of income and diminished the overall progressivity and complexity of national tax systems; however, the degree of this change varies considerably across countries. We also find that the relationship between the tax rates and revenue is positive for high income countries; however, the strength of the relationship declines with weaker institutions and lower levels of economic development.
Number of Pages in PDF File: 54
Keywords: personal income tax, marginal rate, average rate, tax complexity, progressivity, flat tax, revenue, global trends
JEL Classification: C8, E62, H2, H87, N10, O1working papers series
Date posted: June 21, 2009
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