Dual Income Taxation: A Promising Path to Tax Reform for Developing Countries

Richard Bird and Eric M. Zolt

World Development, 2011, vol. 39, issue 10, 1691-1703

Abstract: The dual income tax combines a progressive tax on labor income and a lower flat tax on income from capital. Unlike flat tax systems, a dual income tax provides developing countries greater flexibility in addressing tax competition while retaining progressivity. Countries could use the move to a dual income tax system not just as an opportunity to rationalize the taxation of income from business operations and investment but also as a vehicle for broader reform of their tax systems.

Keywords: income tax; tax reform; tax competition; progressivity (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:39:y:2011:i:10:p:1691-1703

DOI: 10.1016/j.worlddev.2011.04.008

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