Personal income tax mimicry: evidence from international panel data

Denvil Duncan and Edwin Gerrish ()

International Tax and Public Finance, 2014, vol. 21, issue 1, 119-152

Abstract: This paper investigates personal income tax (PIT) mimicry at the international level. It is the first to empirically investigate the extent to which PIT mimicry varies along the tax schedule and the first to include nations which are not part of the OECD. We use data on international personal income tax schedules from the world tax indicators to estimate marginal and average tax rates at various multiples of per capita gross domestic product (GDP). These tax rates are then used to estimate the extent to which countries respond to their neighbors’ PIT policy. We find evidence of PIT mimicry using a balanced panel of 53 countries over 24 years. This finding is strongest for tax rates at lower multiples of per capita GDP and survives several robustness checks. Copyright Springer Science+Business Media New York 2014

Keywords: Personal income tax; Average tax rate; Marginal tax rate; Tax mimicry; Tax competition; H24; H25; H87 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:itaxpf:v:21:y:2014:i:1:p:119-152

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DOI: 10.1007/s10797-012-9261-9

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