Publication Date

7-2006

Abstract

Using a sample of seventy-seven countries, this paper focuses on marginal tax rates and the income thresholds at which they apply to examine how the tax changes of the 1980s and 1990s have influenced economic growth, the distribution of income, and the share of taxes paid by various income groups. Many countries substantially reduced their highest marginal rates during the 1985-1995 period. The findings indicate that countries that reduced their highest marginal rates grew more rapidly than those that maintained high marginal rates. At the same time, the income distribution in several of the tax cutting countries became more unequal while there was little change or even a reduction in income inequality in most countries that maintained high marginal rates. Finally, the evidence suggests that there was a shift in the payment of the personal income tax away from those with low and middle incomes and toward those with the highest incomes.

Document Type

Article

Keywords

Taxation, Economic Development, Income Distribution, Income Inequality, Comparative Analysis, Political Economy

Disciplines

Business | Taxation

Part of

Social Philosophy and Policy

Publisher

Cambridge University Press

Creative Commons License

Creative Commons Attribution-Noncommercial 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial 4.0 License

Included in

Taxation Commons

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