What makes the personal income tax progressive? A comparative analysis for fifteen OECD countries

Adam Wagstaff*, Eddy Van Doorslaer

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

37 Citations (Scopus)

Abstract

In this paper, we explore the roles of tax credits, rate structures, allowances and deductions in determining the overall progressivity of net income tax liabilities in fifteen OECD countries. Three clusters emerge: (i) the rate-structure countries, Australia, France, Italy, the Netherlands and Spain, where the rate effect is the dominant (but not the only) source of progressivity of gross and net tax liabilities; (ii) the allowance countries, the English-speaking countries other than Australia, where allowances are the dominant source of progressivity; and (iii) the mixed structure countries, Belgium, Finland, Germany and Sweden, where roughly half of the progressivity of gross tax liabilities is attributable to the rate structure.

Original languageEnglish
Pages (from-to)299-316
Number of pages18
JournalInternational Tax and Public Finance
Volume8
Issue number3
DOIs
Publication statusPublished - 2001

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