Download This PaperGlobal Reform of Personal Income Taxation, 1981-2005: Evidence from 189 Countries
53 Pages Posted: 10 Feb 2008 Last revised: 25 Jun 2009
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Global Reform of Personal Income Taxation, 1981-2005: Evidence from 189 Countries
Global Reform of Personal Income Taxation, 1981-2005: Evidence from 189 Countries
Date Written: April 1, 2009
Abstract
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.
Keywords: personal income tax, tax complexity, progressivity, flat tax, global trends
JEL Classification: C8, E62, H2, H87, N10, O1
Suggested Citation: Suggested Citation
IZA Institute of Labor Economics
P.O. Box 7240
Bonn, D-53072
Germany
Steven Craig Buttrick
Georgia State University - Department of Economics ( email )
P.O. Box 3992
Atlanta, GA 30302-3992
United States
Denvil Duncan
Indiana University Bloomington - School of Public & Environmental Affairs (SPEA) ( email )
1315 East Tenth Street
Bloomington, IN 47405
United States