The Personal Income Tax

A recent paper argues persuasively that the two basic pillars of taxation in most countries are the income tax and the VAT (Barreix and Roca 2007). The authors argue that the VAT is excellent as a revenue raiser and works best if it is applied in t...

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Main Author:	Bird, Richard M.
Format:	Brief
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	AGRICULTURE CAPITAL GAINS CONSUMPTION TAX CONSUMPTION TAXES CORPORATE TAX DEDUCTIONS DEMOCRACY DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT BANK EMERGING MARKETS ESTIMATED TAX EXPENDITURE FISCAL POLICY FLAT TAX FLAT TAXES GDP GOVERNMENT BONDS INCOME GROUPS INFORMAL ECONOMY INTEREST ON BONDS LESS DEVELOPED COUNTRIES OUTSOURCING PENSION PENSION CONTRIBUTIONS PERSONAL INCOME PERSONAL INCOME TAX PERSONAL INCOME TAXES POLITICAL ECONOMY PORTFOLIO PROGRESSIVE TAX REAL ESTATE SMALL BUSINESS SMALL BUSINESSES TAX TAX ADMINISTRATION TAX ARBITRAGE TAX BASE TAX BURDENS TAX INCENTIVES TAX INCIDENCE TAX LIABILITY TAX POLICY TAX RATE TAX RATES TAX REFORM TAX REGIME TAX REGIMES TAX REVENUE TAX REVENUES TAX SYSTEM TAX SYSTEMS TAXABLE INCOME TAXATION TAXATION OF CAPITAL INCOME TAXES ON LABOR INCOME TAXPAYER TAXPAYERS TURNOVER WITHHOLDING TAX
Online Access:	http://documents.worldbank.org/curated/en/2009/06/11362008/personal-income-tax http://hdl.handle.net/10986/11116

id	okr-10986-11116
recordtype	oai_dc
spelling	okr-10986-111162021-04-23T14:02:54Z The Personal Income Tax Bird, Richard M. AGRICULTURE CAPITAL GAINS CONSUMPTION TAX CONSUMPTION TAXES CORPORATE TAX DEDUCTIONS DEMOCRACY DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT BANK EMERGING MARKETS ESTIMATED TAX EXPENDITURE FISCAL POLICY FLAT TAX FLAT TAXES GDP GOVERNMENT BONDS INCOME GROUPS INFORMAL ECONOMY INTEREST ON BONDS LESS DEVELOPED COUNTRIES OUTSOURCING PENSION PENSION CONTRIBUTIONS PERSONAL INCOME PERSONAL INCOME TAX PERSONAL INCOME TAXES POLITICAL ECONOMY PORTFOLIO PROGRESSIVE TAX REAL ESTATE SMALL BUSINESS SMALL BUSINESSES TAX TAX ADMINISTRATION TAX ARBITRAGE TAX BASE TAX BURDENS TAX INCENTIVES TAX INCIDENCE TAX LIABILITY TAX POLICY TAX RATE TAX RATES TAX REFORM TAX REGIME TAX REGIMES TAX REVENUE TAX REVENUES TAX SYSTEM TAX SYSTEMS TAXABLE INCOME TAXATION TAXATION OF CAPITAL INCOME TAXES ON LABOR INCOME TAXPAYER TAXPAYERS TURNOVER WITHHOLDING TAX A recent paper argues persuasively that the two basic pillars of taxation in most countries are the income tax and the VAT (Barreix and Roca 2007). The authors argue that the VAT is excellent as a revenue raiser and works best if it is applied in the simplest and most neutral fashion possible that is, on as broad a base as possible and preferably at a uniform rate. Given the relative unimportance of personal income taxes in most developing countries this argument is at first sight perhaps somewhat surprising. Personal income tax (PIT) revenues are often three to four times corporate tax revenues in developed countries, but in developing countries corporate tax revenues usually substantially exceed PIT revenues. As a percentage of gross domestic product (GDP), PIT revenues in developed countries average about seven percent of GDP as compared to about two percent for developing countries. Moreover, as Bird and Zolt (2005) note, in many developing countries personal income taxes often amount to little more than taxes on labor income. At the same time, although little revenue is received from capital income, income taxes often impose high marginal effective rates on investment and hence discourage growth. 2012-08-13T14:11:37Z 2012-08-13T14:11:37Z 2009-06 http://documents.worldbank.org/curated/en/2009/06/11362008/personal-income-tax http://hdl.handle.net/10986/11116 English PREM Notes; No. 137 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Brief Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	AGRICULTURE CAPITAL GAINS CONSUMPTION TAX CONSUMPTION TAXES CORPORATE TAX DEDUCTIONS DEMOCRACY DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT BANK EMERGING MARKETS ESTIMATED TAX EXPENDITURE FISCAL POLICY FLAT TAX FLAT TAXES GDP GOVERNMENT BONDS INCOME GROUPS INFORMAL ECONOMY INTEREST ON BONDS LESS DEVELOPED COUNTRIES OUTSOURCING PENSION PENSION CONTRIBUTIONS PERSONAL INCOME PERSONAL INCOME TAX PERSONAL INCOME TAXES POLITICAL ECONOMY PORTFOLIO PROGRESSIVE TAX REAL ESTATE SMALL BUSINESS SMALL BUSINESSES TAX TAX ADMINISTRATION TAX ARBITRAGE TAX BASE TAX BURDENS TAX INCENTIVES TAX INCIDENCE TAX LIABILITY TAX POLICY TAX RATE TAX RATES TAX REFORM TAX REGIME TAX REGIMES TAX REVENUE TAX REVENUES TAX SYSTEM TAX SYSTEMS TAXABLE INCOME TAXATION TAXATION OF CAPITAL INCOME TAXES ON LABOR INCOME TAXPAYER TAXPAYERS TURNOVER WITHHOLDING TAX
spellingShingle	AGRICULTURE CAPITAL GAINS CONSUMPTION TAX CONSUMPTION TAXES CORPORATE TAX DEDUCTIONS DEMOCRACY DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT BANK EMERGING MARKETS ESTIMATED TAX EXPENDITURE FISCAL POLICY FLAT TAX FLAT TAXES GDP GOVERNMENT BONDS INCOME GROUPS INFORMAL ECONOMY INTEREST ON BONDS LESS DEVELOPED COUNTRIES OUTSOURCING PENSION PENSION CONTRIBUTIONS PERSONAL INCOME PERSONAL INCOME TAX PERSONAL INCOME TAXES POLITICAL ECONOMY PORTFOLIO PROGRESSIVE TAX REAL ESTATE SMALL BUSINESS SMALL BUSINESSES TAX TAX ADMINISTRATION TAX ARBITRAGE TAX BASE TAX BURDENS TAX INCENTIVES TAX INCIDENCE TAX LIABILITY TAX POLICY TAX RATE TAX RATES TAX REFORM TAX REGIME TAX REGIMES TAX REVENUE TAX REVENUES TAX SYSTEM TAX SYSTEMS TAXABLE INCOME TAXATION TAXATION OF CAPITAL INCOME TAXES ON LABOR INCOME TAXPAYER TAXPAYERS TURNOVER WITHHOLDING TAX Bird, Richard M. The Personal Income Tax
relation	PREM Notes; No. 137
description	A recent paper argues persuasively that the two basic pillars of taxation in most countries are the income tax and the VAT (Barreix and Roca 2007). The authors argue that the VAT is excellent as a revenue raiser and works best if it is applied in the simplest and most neutral fashion possible that is, on as broad a base as possible and preferably at a uniform rate. Given the relative unimportance of personal income taxes in most developing countries this argument is at first sight perhaps somewhat surprising. Personal income tax (PIT) revenues are often three to four times corporate tax revenues in developed countries, but in developing countries corporate tax revenues usually substantially exceed PIT revenues. As a percentage of gross domestic product (GDP), PIT revenues in developed countries average about seven percent of GDP as compared to about two percent for developing countries. Moreover, as Bird and Zolt (2005) note, in many developing countries personal income taxes often amount to little more than taxes on labor income. At the same time, although little revenue is received from capital income, income taxes often impose high marginal effective rates on investment and hence discourage growth.
format	Publications & Research :: Brief
author	Bird, Richard M.
author_facet	Bird, Richard M.
author_sort	Bird, Richard M.
title	The Personal Income Tax
title_short	The Personal Income Tax
title_full	The Personal Income Tax
title_fullStr	The Personal Income Tax
title_full_unstemmed	The Personal Income Tax
title_sort	personal income tax
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2009/06/11362008/personal-income-tax http://hdl.handle.net/10986/11116
_version_	1764415584247742464

The Personal Income Tax

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