Taxpayer Bunching Evidence: Responsiveness at Kink Points of the Honduran Personal Income Tax

2021 ◽  
Vol 40 (1) ◽  
Author(s):  
David Fernando Pineda Pinto ◽  
Roldan Manuel Enamorado Irías
Keyword(s):  
Income Tax ◽  
Personal Income ◽  
The Other ◽  
Third Party ◽  
Personal Income Tax ◽  
Marginal Tax Rate ◽  
Income Source ◽  
Tax Rate ◽  
Gender And Age ◽  
Wage Earners

This paper studies the response of taxpayers to changes in the marginal tax rate or kinks, estimated through compensated elasticities by applying the bunching methodology to Honduran administrative data on Personal Income Tax (PIT) from the period 2011 – 2018. Due to missing data issues at the first kink, estimates are only generated for the other two kinks. The results show a low response, reflected by a compensated elasticity around 0.09. Higher response on wage earners was found at the second kink. Further analysis is done by type of taxpayer, income source, third-party reporting, gender, and age.

Who Benefits from Indexation?

1987 ◽  
Vol 15 (1) ◽  
pp. 27-44
Author(s):  
James Alm ◽  
Reuben A. Zubrow
Keyword(s):  
Income Tax ◽  
Personal Income ◽  
Relative Importance ◽  
Percentage Reduction ◽  
Personal Income Tax ◽  
Marginal Tax Rate ◽  
Tax Rate ◽  
Income Class ◽  
Standard Deduction ◽  
Over Time

This article analyzes the distributional effects of indexation of the standard deduction, the personal exemption, and the marginal tax rate brackets in the personal income tax. The analysis focuses upon Colorado, a state that enacted full indexation of its personal income tax in 1978. It is found that full indexation is decidedly pro-poor: The percentage reduction in taxes due to indexation falls as income rises, with the percentage reduction nearly four times as great for the lowest income class as for the highest. The factors giving the largest proportional benefit to the lowest-income taxpayers are indexation of the standard deduction and, to a lesser extent, the rate brackets, although the relative importance of the various indexation factors is shown to vary over time.

scholarly journals Tax Law: Third Party As Payer of Income from Dependent Activity

2013 ◽  
Vol 13 (1) ◽  
pp. 147-161
Author(s):  
Jana Tepperová ◽  
Lucie Rytířová
Keyword(s):  
Income Tax ◽  
Personal Income ◽  
Point Of View ◽  
Third Party ◽  
Personal Income Tax ◽  
The Czech Republic ◽  
International Regulations ◽  
Set Up ◽  
Specific Tax ◽  
Collection Point

Abstract Employment related income paid by a third party (non-employer) has its specific tax treatment. In the Czech Republic, a different approach applies for calculation of personal income tax and obligatory insurance contributions from this income. With the preparation of the Single Collection Point (unifying the collection of personal income tax and obligatory insurance contributions), the question arises whether it is possible to set up unified treatment of this income for all obligatory payments. We provide detailed analyses of this topic from the point of view of the Czech legislation and comparison with selected countries. Further we follow with the discussion of problematic issues in unified treatment for all obligatory payments from this income; such as discrimination and complicated administration. We conclude that even if the national legislation for all obligatory payments from this income would not diff er, there will still be different treatment due to specific international regulations.

scholarly journals Evaluation the impact of the personal income tax reform in the Czech Republic in 2021 on effective tax rate and tax progressivity

2021 ◽  
Vol 7 (2) ◽  
pp. 134-145
Author(s):  
M. Krajňák ◽  
Keyword(s):  
Income Tax ◽  
Tax Reform ◽  
Personal Income ◽  
Personal Income Tax ◽  
Effective Tax Rate ◽  
Tax Base ◽  
Tax Rate ◽  
Tax Progressivity ◽  
The Impact ◽  
Income Tax Reform

Legislation governing personal income taxation is often subject to changes. A significant personal income tax reform was carried out in the Czech Republic in 2021. The reform implements a progressive tax rate, changes the way the tax base is determined, and increases the tax relief for the taxpayer. The aim of the article is to evaluate the impact of the personal income tax reform on the effective tax rate and tax progressivity. To that end, methods of regression analysis have been used. The source of information for analysis was the data published by the Czech Statistical Office. It was found that in 2021, in comparison with 2020, the tax burden represented in this study by the effective tax rate, in all cases became lower, approximately by 5%. The main reason for this decline is the adjustment of the method of construction of the tax base, which, for the first time in the history of the Income Tax Act, is gross wages. Until the end of 2020, the tax base was a super-gross wage, or the gross wage increased by social security contribution borne by the employer at his costs. The second factor that reduces the tax burden is a CZK 3,000 increase in the deduction per taxpayer per year. This fact increases the degree of tax progressivity, as confirmed by the results of the progressivity analysis and the regression analysis. The changes that have taken place in the personal income tax this year have a positive impact on the taxpayer, but from the point of view of the state, this reform has reduced the state budget revenues.

The Wage Response to a Reduction in Income Tax Rates: The Israeli Tax Reform

2020 ◽  
Vol 20 (2) ◽  
Author(s):  
Roni Frish ◽  
Noam Zussman ◽  
Sophia Igdalov
Keyword(s):  
Income Tax ◽  
Tax Reform ◽  
Tax Rates ◽  
Rate Reduction ◽  
Or Education ◽  
Marginal Tax Rate ◽  
Tax Rate ◽  
Percentage Points ◽  
Wage Earners ◽  
Income Tax Reform

AbstractThis study examines the effect of an income tax reform on wages. An Israeli reform implemented in 2003–2009 reduced individuals’ marginal income tax rate by 7–17 percentage points. We utilized the differential and non-monotonic marginal tax rate reduction, and used Israel Tax Authority panel data of wage earners, merged with Labor Force Surveys. We found that in the business sector, the elasticity of reported gross wages relative to the net-of-tax rate is about 0.1. The wage earners in the lowest wage quintile were not affected by the tax reform, those in the second and third quintiles did not respond to the tax cut, but elasticity increased with wage, reaching about 0.4 in the upper decile. We did not find statistically significant differences in elasticity by gender, ethnicity, or education.

scholarly journals Can Tax Incentives for Electronic Payments Curtail the Shadow Economy? Korea`s Attempt to Reduce Underreporting in Retail Businesses

2017 ◽  
Vol 32 (2) ◽  
pp. 85-134
Author(s):  
Sung Myung Jae ◽  
Awasthi Rajul ◽  
Lee Hyung Chul
Keyword(s):  
Income Tax ◽  
Shadow Economy ◽  
Positive Impact ◽  
Tax Incentives ◽  
Personal Income ◽  
Personal Income Tax ◽  
Tax Rate ◽  
Gini Coefficients ◽  
Korean Economy ◽  
Business Income

Increasing tax revenues by curtailing the shadow economy has been a central goal of tax policy and administration in the Republic of Korea since the National Tax Service was established as an independent agency in 1966. This paper examines the Tax Incentives for Electronically Traceable Payments (TIETP) introduced by the Korean tax authorities in 1999 to promote payments made using credit cards, debit cards, and electronic cash receipts in business-to-consumer transactions. TIETP allows wage and salary earners to claim tax deductions for eligible purchases made using electronically traceable payments when they file their year-end income tax return. This tax incentive scheme has greatly contributed to transforming the Korean economy into a cashless economy over the last decade and a half. Card payments as a ratio of Korea`s GDP have ranked highest in the world since 2005, reaching 49% in 2014. TIETP has increased the percentage of business income earners who pay taxes from stagnant at around 30% up to the late 1990s to approximately 80% at present. The effective personal income tax rate for business income followed a continuous upward trend from 3.4% in 1998 to 6.3% in 2013. The total revenue increase driven by TIETP has been estimated as \3.4 trillion, with TIETP costs reaching \1.9 trillion. The net gain is an estimated \1.4 trillion (approximately US$1.3 billion), an increase of personal income tax revenue by 4.2%. TIETP also had a positive impact on income redistribution, decreasing Gini coefficients by 0.11 percentage points.

scholarly journals Personal Income Taxation in Poland

Ekonomika ◽  
2008 ◽  
Vol 84 ◽  
Author(s):  
Edyta Małecka-Zieńska
Keyword(s):  
Income Tax ◽  
Value Added ◽  
Personal Income ◽  
Tax Rates ◽  
Personal Income Tax ◽  
Tax Rate ◽  
Tax Exemptions ◽  
Tax Deductions ◽  
The One ◽  
Taxation System

The Polish taxation system has been undergoing substantial changes in recent years, aimed at creating a more transparent system and conforming to the taxation standards of market economy countries. The two most important changes were introduction of the personal income tax (PIT) in 1992 and replacement of the turnover tax with the value added tax (VAT) in 1993. The uniform personal income tax covered all incomes generated by natural persons irrespective of where the sources of income are located. The reform provided also a more equitable distribution of the tax burden by introducing a progressive system with three nominal tax rates (in 1992-20%, 30%, 40%).A comparative study of the effective PIT rate for pensioners and other groups of PIT payers is the main goal of this paper. The study refers to our own research on data received from The information of Polish Ministry of Finance about accounting of PIT in several subsequent years. Statistics cover a period from 1993 to 2003. However, numbers of taxpayers refer also to year 1992 when the PIT has been established and a period from 2004 to 2006.Concluding the situation in Poland, taxpayers with the highest income make exhaustive use of tax reductions. There are occurring situations when well-off people benefit more than people with relatively minor income (e. g. pensioners). It happens even if most of deductions were aimed generally at all taxpayers. Such a situation reduces the impression of the system fairness. Because tax deductions reduce budgetary revenues, the foregone revenues have to be compensated by other taxes or / and higher rates. Therefore, the system of deductions and relief, on the one hand, supports the special gains (e. g. house building), however, on the other it generates costs. It is possible that the reduction of tax rate for the I tax bracket and removal of some tax exemptions and deductions would make the Polish personal income tax more transparent, equal and simple.

scholarly journals Penyesuaian Lapisan dan Tarif PPh Orang Pribadi: Agresif atau Progresif?

Owner ◽  
2022 ◽  
Vol 6 (1) ◽  
pp. 709-721
Author(s):  
Kalyana Mitta Kristanti
Keyword(s):  
Income Tax ◽  
Positive Impact ◽  
Personal Income ◽  
Tax Rates ◽  
Personal Income Tax ◽  
Middle Income ◽  
Tax Rate ◽  
Tax Harmonization ◽  
The Difference ◽  
The Government

In 2022, Indonesia would apply changes in tax brackets and rates for personal income tax. This adjustment is based on the Article 17 Paragraph 1 Tax Harmonization Law Number 7 of 2021. The government tries to accommodate the needs of the community through formulating process of this regulation. In particular, it provides convenience to the lower-middle income community and encourages an even distribution of income. People belonging to the high wealth income will be subject to the highest tariffs that have just been set through this law. Through a qualitative descriptive method in which data collection is carried out by taking from literature review; law, articles, books, and website, the author tries to analyze changes in brackets and rates of personal income tax. This study presents illustrations of the calculation to explain the difference in the amount of income tax payable before and after the implementation of the Tax Harmonization Law. In addition, the analysis of the principles of equity and democracy on the adjustment of layers and tax rates is elaborated in this paper. The results obtained explain that with the application of the new tax rate, taxpayers get a tax burden relief because the tax expense is lower due to the broadening of income range. However, wealthy taxpayers will pay more taxes because of the higher tax rates. This condition proves that the new tax rate supports vertical fairness in the taxation system. In addition, the implementation of regulations related to tax rates adjustment provides evidence that the implementation of democracy has been implemented. The adjustment of tax brackets and rates has a positive impact on the community and the government so that the allocation of tax revenues can run optimally to support the welfare of the community.

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