The Politics of Income Taxation: A Comparative AnalysisMarginal income tax rates in advanced industrial countries have fallen dramatically since the mid-1980s, but levels and progressivity of income taxation continue to differ strongly across countries. This study offers a new perspective on both observations. It blends theoretical inquiry with focused quantitative analysis and in-depth investigation of seven countries: Germany, Australia and New Zealand as well as Denmark, Finland, Norway and Sweden. The Politics of Income Taxation highlights the equity-efficiency tradeoffs that structure the politics of income taxation, and analyses how income taxes are embedded in broader tax systems. It explains the limited but enduring importance of political parties and democratic institutions. Finally, the study paints a nuanced picture of the role of globalisation and thus sheds light on the pros and cons of tax coordination at European and international levels. |
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30 per cent above-normal returns analysis Australia Bundesrat business tax capital gains capital income taxation centre-right coalition corporate and personal corporate tax competition corporate tax rate Denmark differentiated income tax dividends dual income tax economic ECPR equity Expenditure Taxes explained flat income tax flat tax Ganghof Germany goal Hallerberg and Basinger ideology and veto important income tax rate income tax reform income tax revenue income tax system increase investment labour income majority marginal tax rates market-conformity minority government Nordic countries OECD party ideology personal income tax personal tax rate policy preferences policymakers political profits progressive tax progressivity proposal reduce the top regression result shareholders Social Democrats tax base tax cuts tax policy tax rate gap tax reform Tax-vs-spend tion top marginal tax top personal income top personal rate top personal tax top rate top tax rate trade-offs trilemma veto institutions veto players veto point Zealand
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Page 53 - ... improvements. But the latter would also be debarred from making many undesirable special provisions, and in the world as it is the acceptance of a simple system based on one or two easily understood, clear rules (provided, of course, that they were well chosen rules) would almost certainly be preferable. There will, of course, inevitably be some special exceptions and exemptions; but it is desirable to start from some simple, reasonable, clearly understood general set of rules, from which only...
Page 39 - Step 3 institutes a form of integration of the corporate and individual income-tax systems. In a world of graduated personal tax rates, a reconciliation between corporate taxes already paid and the eventual individual tax liability must be done at the individual level, in order to retain the graduated taxation of corporate income. However, when all personal marginal rates are equal to each other and to the corporate rate, a form of integration can be accomplished by simply exempting dividends; capital...
Page 99 - The efficiency advantages [nondifferentiation efficiency] stemming from Norway's dual income tax may have more than outweighed this drawback so far, but an increase in the rate of capital taxation from its present level of 28 per cent, an issue which has remained on the political agenda, would tend to accentuate the disadvantages.
Page 66 - This would allow tax rates to be sufficiently low to avoid capital flight and excessive emigration of highly skilled labour....
Page 27 - This is the normal return— the return that can be earned on a marginal investment in capital, which is competed down to a fairly low level. Above-normal returns go beyond that level. They include various things, eg, returns to innovation, returns to establishing a monopoly in some market or returns to entrepreneurial skill. Bill Gates...
Page 36 - PIT (personal income taxes) should be replaced rather than reformed. During this period, proposals emerged from a number of public finance economists as well as tax reform commissions in Ireland, Sweden, the United Kingdom, and the United States to replace or supplement the income tax by a progressive expenditure tax.
Page 30 - Under a wage tax, relabeling your labor compensation as capital income would be an easy avenue to escape taxation altogether. The difficulty of distinguishing what is labor income and what is capital income is an important reason that a pure wage tax would end up being highly inequitable and costly to enforce" (Slemrod and Bakija 2004: 204).
Page 40 - Increased international integration of financial markets increases the social costs of distortionary taxes on income from capital. What cannot be explained by the increased capital mobility is why most OECD countries responded by lowering the rate at which profits are taxed. Tax neutrality can be attained with either a zero tax on profits, or 100 per cent deductibility of investment.