Inflation and the Personal Income Tax: An International by Vito Tanzi

By Vito Tanzi

Inflation distorts source of revenue taxes in lots of methods, yet essentially through redistributing the tax burden between taxpayers. This learn analyses intimately the results of inflation on source of revenue tax platforms in lots of nations. It examines the various extra vital distortions of source of revenue tax structures attributable to inflation and discusses attainable corrective measures, starting from computerized alterations (indexation) to advert hoc responses. those corrective measures are in comparison with the particular reviews of many nations that experience pursued rules aimed toward neutralizing the results of inflation. by means of treating the matter of inflation and source of revenue taxes in a complete demeanour and from a global point of view, this publication fills a huge hole within the source of revenue tax literature and may turn out helpful to expert economists, coverage makers serious about tax difficulties, tax attorneys and accountants.

Show description

Read or Download Inflation and the Personal Income Tax: An International Perspective PDF

Similar macroeconomics books

Currency competition and foreign exchange markets

Foreign money pageant and foreign currencies Markets is a tremendous new theoretical and empirical research of foreign currencies that makes a speciality of the position the Euro (the destiny ecu foreign money) will play within the overseas financial and fiscal approach, besides the USA greenback and the japanese yen. unlike a lot of the present literature that methods the topic from a macroeconomic point of view, Philipp Hartmann develops a theoretical version that makes use of online game thought, time sequence and panel econometrics, and hyperlinks monetary markets research with transaction price economics.

Money, Crises, and Transition: Essays in Honor of Guillermo A. Calvo

Essays by means of popular students and policymakers honor some of the most influential macroeconomists of the final thirty years, discussing the topics at the back of his paintings.

Market Socialism or the Restoration of Capitalism? (International Council for Central and East European Studies)

The cave in of communism in jap Europe has raised a couple of questions in regards to the destiny process their economies. Has capitalism received or is anything various rising? Has marketplace socialism vanished for strong? How can the transitionary interval be controlled and what impact will it have at the lifestyle in japanese Europe?

Handbook of Tourism Economics: Analysis, New Applications and Case Studies

Instruction manual of Tourism Economics: research, New functions and Case stories presents an up to date, concise and readable assurance of crucial issues in tourism economics. It will pay consciousness to correct conventional themes in tourism economics in addition to fascinating rising subject matters during this box -- themes that are anticipated to be of continuous significance.

Additional resources for Inflation and the Personal Income Tax: An International Perspective

Example text

In these countries , the exemptions and deductions in fixed amounts, as well as the brackets, are fully , annually, and automatically increased to reflect changes in the consumer price index. This is undoubtedly the purest form of au­ tomatic adjustment for inflation . ructure of 24 Inflation and the personal income tax the personal income tax . For 1 975, the increase in exemption levels and in bracket limits due to indexation was 10. l percent. For 1 976, 1 977, and 1 978 it was 1 1 . 2 percent, respectively.

Even then, only part of the gains are generally included in taxable income; or, alternatively, they are taxed at lower rates than other incomes. In the absence of inflation, this pre­ ferential tax treatment definitely favors those who receive these gains. When inflation is present , capital gains will be distorted and, as nor­ mally measured , will no longer conform to the Schanz-Haig-Simons definition of income. As Goode has put it, "Appreciation in the price of an asset that reflects only a general rise in prices is a fictitious gain because it gives the investor no increased command over goods and services.

For Australia, the lag is similar to that of Canada. Substantial lags exist in all the other coun­ tries that index their tax systems. When the rate of inflation is stable , these lags may not create serious difficulties; however, whenever the rate of inflation accelerates or decelerates, the index being used for making the adjustment in a given year will no longer be adequate , so that the ratio of tax payment to current income will change, causing difficulties for stabilization policy and bringing about distortions in the distribution of the tax payments.

Download PDF sample

Rated 4.15 of 5 – based on 29 votes