How should Individuals be Taxed? Combining "Simplified", Income, and Payroll Taxes in Ukraine

James Alm (), Pablo Saavedra and Edward Sennoga

International Center for Public Policy Working Paper Series, at AYSPS, GSU from International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University

Abstract: Individuals in most all countries face a wide range of direct taxes on their income, especially variants of the individual income tax and payroll taxes. For the income tax, attempts are often made to reduce the compliance and administrative costs of the tax by using “presumptive” or “simplified” methods, in which the tax liability is determined indirectly from some simple indicators that are more easily measured than the “true” tax base itself. However, when a “simplified” income tax is combined with other direct taxes on individuals, the ways in which these taxes interact, their combined effects on revenues, resource allocation, and income distribution, and the appropriate design of the overall system of these taxes remain unresolved – and unexplored – issues. This paper examines these issues, focusing on the experience of Ukraine . A simple computable general equilibrium model is used to quantify many of the effects of the “system” of simplified, income, and payroll taxes.

Keywords: Income Tax; payroll Tax; Ukraine; individual tax; presumptive method (search for similar items in EconPapers)
Pages: 35 pages
Date: 2007-06-01
New Economics Papers: this item is included in nep-cmp, nep-pbe and nep-pub
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http://icepp.gsu.edu/files/2015/03/ispwp0711.pdf (application/pdf)

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Journal Article: How Should Individuals Be Taxed?. Combining "Simplified", Income, and Payroll Taxes in Ukraine (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:ays:ispwps:paper0711

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