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EFFECTS OF PERSONAL INCOME TAX ON INCOME DISTRIBUTION: EXAMPLE FROM BULGARIA
Author(s) -
HASSAN FAREED M. A.,
BOGETIĆ ŽELJKO
Publication year - 1996
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/j.1465-7287.1996.tb00630.x
Subject(s) - economics , gross income , state income tax , income distribution , adjusted gross income , labour economics , distribution (mathematics) , income tax , economic inequality , international taxation , dividend tax , progressive tax , net national income , demographic economics , inequality , tax reform , public economics , mathematical analysis , mathematics
This study utilizes the 1992 Bulgarian household budget survey to analyze the distribution of income and income tax burden. Results indicate that the country is characterized by low income inequality, though this is changing rapidly. The findings also show that the present income tax system is progressive and that the urban sector pays much more relative to its income. Despite a steeply graduated statutory tax rate schedule, effective progression is rather modest, indicating significant tax evasion. However, one must view the results of progressivity and urban bias cautiously. As in‐kind income becomes monetized and as the economy becomes more market‐oriented, both progressivity and urban/rural differences will wane over time.