Designing and Displaying the Income Tax Scale under Progressivity
Abstract
In most countries, a progressive tax is levied on the income of individuals. This article addresses the different design of a progressive tax scale taking into account the issue of the so-called tax bubbles that constitute an increased MTR. This feature of the tax function is a result of the exclusion of the high income taxpayers from the basic allowance or reduced tax rates. As shown in the article, this may lead to a higher tax burden under the joint taxation compared to the separate taxation. The analysis refers to the tax scales in Germany, Poland, the UK and the USA.
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DOI: http://dx.doi.org/10.17951/h.2017.51.4.289
Date of publication: 2017-12-08 15:26:48
Date of submission: 2017-04-20 14:45:48
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