Progressive Tax Research Articles

Recuperation mechanism of direct taxation to control post covid economic contraction: India’s new tax reform with crypto tax

This study explores the impact of the progressive tax structure on income equality, emphasizing the significance of direct taxes in promoting economic and social equality. It also examines the challenges faced by the Indian government in meeting its revenue targets due to the decline in corporation tax and personal income tax revenues. The present study assesses the role of the newly implemented tax by the Indian Finance Ministry on capital gains from the sale or purchase of cryptocurrencies and its impact on economic growth. A qualitative approach has been adopted, utilizing secondary information sources for characterization and analysis. The study relies on Time Series Data from the Income Tax Department for the financial years 2000-01 to 2018-19 and global estimates of total tax revenues published by the International Centre for Tax and Development (ICTD). The findings indicate that the substantial decline in direct tax revenues necessitated a search for alternative sources of income. The separate taxation system for cryptocurrencies has legitimized digital assets and enabled the government to monitor transactions and capital gains. The introduction of the "Digital Rupee" aims to enhance the digital economy through efficient currency management. This research highlights the need for policymakers to develop a well-defined regulatory framework for cryptocurrency taxation. Clear regulations on cryptocurrency taxation and the "Digital Rupee" could help India boost its digital economy while ensuring better monitoring of crypto transactions and revenues.

Unevenly Unequal Responsiveness: Public Opinion and Redistributive Policy Shifts in Western Europe Since 2008

Recent studies puzzle over why it is that democratically elected governments have not responded to rising inequality by engaging in more redistribution. While some scholars argue that low- and middle-income citizens have not responded to rising inequality in the way we would expect, others argue that policymakers are not responsive to the demands of these citizens. We argue that both solutions to the “lack-of-redistribution puzzle” leave something to be desired and that variation across policy domains sheds new light on the issues at stake in this debate. Based on an original 2019 survey replicating questions asked by the European Social Survey in 2008, we show that support for progressive income taxation and more egalitarian unemployment insurance has increased in most West European countries since 2008. Tax policy has moved in the same direction as public opinion, but unemployment policy has not. We conclude that public opinion should be conceived as a constraint on policymakers motivated by political-economy considerations rather than a driver of policy developments.

Stock returns and tax progressivity

We study the effects of tax progressivity on stock returns in the US. Using the Local Projection method and the novel progressivity tax data from 1969 to 2016 provided by Borella et al. (2023), we show that a tax progressivity shock reduces stock market returns and the risk premium in the first year after the shock. When we examine industry-level portfolio returns, we find negative effects on the consumer and manufacturing industries but no impact on the health and high-tech industries. Our empirical findings are robust to a battery of robustness tests and are consistent with the stock market anticipating a negative impact of tax progressivity on future GDP growth.

Examining the effectiveness of dissuasive taxes as a policy tool for reducing tobacco and alcohol consumption in Cameroon: A welfare and microsimulation analysis

Deterrent taxes are a crucial policy tool for reducing the consumption of harmful products like tobacco and alcohol. However, assessing dissuasive taxes impact different income groups is important to ensure that their burden is not disproportionately borne by low-income households. This study examines the effectiveness of deterrent taxes as an economic policy tool for reducing tobacco and alcohol consumption in Cameroon. We analyse the impact on household welfare and distributional effects using microsimulation analysis. The data come from the Cameroon Household Living Conditions Survey and the 2022 tax records. Our methodology is based on a dynamic computable general equilibrium (CGE) model enriched with an addiction model. The results indicate that deterrent taxes can significantly reduce the consumption of these harmful products but also have regressive effects on low-income households. In response, we recommend the adoption of a progressive tax structure and the establishment of targeted support programmes to mitigate the negative impact on vulnerable populations.

Progressive Personal Income Tax Rate: innovations 2025

The study considers changes made to the Tax Code of the Russian Federation, which significantly change the tax rates on personal income tax. The study examined the specifics of applying progressive tax rates to the income of employees and individuals attracted by medical organizations under civil law contracts — residents of personal income tax. An analysis of innovations in 2025 in this area was carried out — it was noted that there was a significant expansion of the range of tax rates, which led to an increase in the tax burden of highly paid categories of employees. it is emphasized that the maximum tax rate (22%) will not lead to a significant decrease in motivation for the continuation of the activities of individuals with high incomes. Examples of personal income tax calculation are given when applying the taxation scales in force in 2024 and coming into force in 2025.

How redistribution can make carbon taxes more acceptable to the public

ABSTRACT Carbon taxation is a market-based, incentive-driven policy tool, and it is often recommended in mainstream environmental economics. However, it is, by design or in effect consumption taxation, meant to make high-emission products and services more expensive. When affecting consumer prices, the unintended consequence is that they affect those who earn the least the hardest. As a result, low-income groups are generally less supportive of carbon taxes. However, carbon tax reforms need not be regressive. Policy designs can include mechanisms of social compensation. In this article, we show that the popularity of carbon taxes can be improved if citizens are presented with a progressive carbon tax reform. This effect is mainly driven by higher support among low-income groups. This is tested using a split-sample experiment collected in Denmark and employing regressions to explore the differences.

An examination of direct and indirect taxation in OECD countries and the case of Greece

This paper attempts to analyze and interpret the principles of direct and indirect taxation. Initially, a theoretical approach to the general concepts and principles governing tax law is presented. It is followed by a presentation of the Greek tax and financial system. The key points demonstrating the harmonization of tax legislation, in accordance with the OECD (Organization for Economic Cooperation and Development) guidelines so far are highlighted. Any future reform of the Greek national tax system should incorporate the fundamental principles of national tax policy. Additionally, it must be in line with OECD principles and guidelines. The further implementation of the Organization's recommendations will shift the balance between direct and indirect taxation, leading to strengthening the first and reducing the second. Over the last decades, the ratio of direct to indirect taxes has been on the increase, particularly in developed countries. The main reason is that direct taxation is socially just and effective. Direct taxation is attributed by the liable person, while indirect taxation is transferred according to the ability of each person to react to the relevant market. The OECD supports, for member countries, the strengthening of direct taxation, which takes into account income and other social criteria and satisfies both the criterion of efficiency and the criterion of fair distribution of economic burdens. On the contrary, indirect taxation is reduced to inversely progressive taxation in terms of the income of consumers and is not consistent with the OECD principles of socially just and effective taxation in economically developed countries. The taxation of the citizens in general follows the principle of the citizens contributing to the public burdens according to their powers, for there is nothing more unjust than to treat unequal men as equals. From this proportional treatment of the taxing units, the constitutional principle of equality is also satisfied by reflection.

The Dynamics of Disparity: A Comprehensive Analysis of the Causes and Consequences of Income and Wealth Inequality and Policy Interventions for Mitigation

In today's global economy, economic disparities remain a pressing issue, persisting across different societies. This paper explores the causes, impacts, and potential policy interventions to address income and wealth inequality. The analysis draws on insights from prominent economists such as Darren Acemoglu, James A. Robinson, Joseph E. Stiglitz, Branko Milanovic, Thomas Piketty, and Emanuel Saez. According to the study, globalization, automation, and labor market dynamics are key economic factors driving inequality. In addition, political and social factors, including tax policies, governance models, and access to education and healthcare, significantly impact economic distribution. The consequences of inequality are multifaceted, affecting economic growth, social mobility, social health, and political stability. Furthermore, this paper discusses various policy interventions, such as progressive taxation, improved access to quality education and healthcare, and more robust social safety nets, as potential solutions to mitigate the adverse effects of economic disparities and promote a more equitable distribution of wealth.

Lost jobs, new jobs and optimal tax-transfer reforms

AbstractAutomation and globalisation imply deep changes in the labour market. An important policy issue is whether and how the tax-transfer rules should be reformed to help coping with those changes. While the prevailing response has consisted of more sophisticated designs of mean-testing and targeting, we also witness an increasing interest in policies inspired by simplicity. Using a combination of behavioural microsimulation and numerical optimization, we look for a (social welfare) optimal tax-transfer rule within a flexible class where total household disposable income is a 4th-degree polynomial in total household taxable income plus a constant. We use a model of household labour supply that makes it possible to account for equilibrium constraints and evaluate the effects of changes of the labour demand scenario. Beside the (observed) Status quo scenario, we consider two alternative stylized cases: the “Jobless” scenario and the “Polarised” scenario. We simulate and compare the social welfare attained by the current tax-transfer rules under the three scenarios and the social welfare attained by the different polynomial optimal tax-transfer rules identified in each scenario. We present results using the 2015 EU-SILC data sets for France, Germany, Italy and Luxembourg. The polynomial optimal rules are social welfare superior to the current ones in all the countries and under all the scenarios and—with the exception of Luxembourg—are close to a Universal Basic Income (or a Negative Income Tax) plus a not-too progressive tax rule (close to a Flat Tax).

The Impact of Taxation on the Cost of Living: A Comprehensive Analysis

This study examines the taxation-related factors affecting Malaysia's cost of living. The rising cost of living, a persistent issue in economics and social well-being, is often linked to global challenges faced by emerging nations. Direct tax has been identified as a primary contributor to the financial strain on households, who must manage various essentials beyond food, clothing, and shelter, such as education, cellular services, and transportation. The study analyzes the relationship between seven independent variables—direct tax, unemployment rate, exchange rate, household consumption expenditure, house price index, subsidies, and net trade—and the cost of living in Malaysia, using 30 years of annual data (1992-2022) with EViews for econometric analysis. This study uses descriptive statistical analysis for the description of data, coefficient matrix analysis and regression analysis for determining the impact of dependent and independent variables. The findings show that the cost-of-living pressures are positively correlated with direct tax, housing price index, and net trade. Data was sourced from the National Property Information Centre (NAPIC), the World Bank, and the Economic Planning Unit (EPU). The analysis underscores the significant impact of direct tax on the cost of living. To mitigate this impact, governments could implement fair and progressive tax reforms, provide targeted subsidies, and promote economic growth to boost income levels. Additionally, social programs and efficient government investment can further reduce household financial burdens.

Progressive Income Tax and Its Emerging Growth Effects: A Complex System Approach

Progressive Income Tax and Its Emerging Growth Effects: A Complex System Approach

Ш. М. ТАЛЕЙРАН И МОДЕРНИЗАЦИЯ ФИНАНСОВОЙ СИСТЕМЫ ФРАНЦИИ В 1789 - 1791ГГ.

The article examines the financial problems of France in the period 1789-1791. At the end of the Ancien Regime, the state faced very serious problems in the financial sector: a huge public debt and an ineffective fiscal system. These problems, which accumulated over many years of absolutism, became one of the causes of the revolution. It is not surprising that the Constituent Assembly tried to resolve these issues as a matter of priority. Among the measures taken by legislators, it is worth noting the introduction of paper money - an assignat to ensure the sale of national property and the development of new progressive taxes. Charles Maurice Talleyrand was one of the representatives of those reformers who made a significant contribution to the creation of the new financial system of the kingdom. Having previously held the post of general agent of the clergy, the Bishop of Autun was well acquainted with the problems in the current sphere, which allowed him to draw the correct conclusion about the current state of the state's economy. The study shows Talleyrand's role in eliminating the tax burden of the Old Regime and the reformer's point of view on the introduction of assignats.

Effect of Economic Policies on Income Inequality: A Comparative Study of Switzerland and Bolivia

Purpose: The aim of the study was to examine the effect of economic policies on income inequality: a comparative study of Switzerland and Bolivia. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: Switzerland, with its advanced economy, implements progressive tax policies, robust social welfare programs, and equitable education systems, contributing to relatively low income inequality. In contrast, Bolivia, a developing nation, faces challenges in reducing income inequality due to less effective economic policies, limited social safety nets, and a larger informal sector. The study underscores that while Switzerland's policies effectively mitigate income disparities, Bolivia's efforts are hindered by structural economic issues and policy limitations. Unique Contribution to Theory, Practice and Policy: The Kuznets curve theory, the human capital theory & the social stratification theory may be used to anchor future studies of climate change on risk management practices in agriculture in Switzerland. From a practical perspective, the study provides actionable insights for improving the design and implementation of economic policies. The study offers several policy recommendations for both developed and developing economies. Policymakers in Switzerland should consider revising tax policies to address the increased burden on higher-income individuals and improve the overall equity of the system.

Wealth and history: A reappraisal

The study revisits trends and drivers of wealth inequality and accumulation since the onset of industrialization. Empirical analysis reveals that Western countries are both wealthier and more equal today than a century ago. Wealth concentration has declined in all countries over the past century, remaining at historically low levels in Europe, while rising in the United States. These trends are largely driven by new wealth accumulation among the lower and middle classes, primarily through housing and pension savings, rather than a decline in the fortunes of the affluent. The findings challenge the view that unregulated capitalism inevitably leads to extreme wealth concentration and question the idea that wealth equalization requires shocks to capital, such as wars or progressive taxation. Instead, the evidence emphasizes the equitable effects of economic and political institutions that enable ordinary individuals to build personal wealth.

Fighting Inequality Through a Progressive Tax System for a Just Future in Tanzania

The problem of inequality is one of the economic problems that developing countries still face including Tanzania. This research therefore focuses on presenting the status and trends of inequality and the progressive tax system to pay for a just future in Tanzania. Research was anchored on the Ability-to-Pay Principle. The study was typically a desk research whereby it dwelled on analyzing and synthesizing large amounts of complex secondary data/information and literature concerning the issue of inequality in Tanzania. The target population for this study consists of secondary data sources, which included Peer-reviewed journal articles on taxation and inequality Government reports and taxation data from the Tanzania Revenue Authority (TRA). A purposive sampling methodology was employed to choose relevant studies and reports. This approach ascertained that only sources directly related to the research goals were included. The sample consisted of 20 sources, selected based on criteria such as: Year of publication. Content analysis was adopted in analyzing data to discover themes, patterns and trends related to progressive tax systems, income inequality reduction, and wealth distribution. Key variables such as tax policies, inequality measures (Gini coefficient), and wealth distribution patterns were extracted and analyzed to determine the effectiveness of progressive taxation in Tanzania. Findings revealed that while progressive taxes can be a remedy, the presence of large informal sectors, as in Tanzania, hinder their reach. Thus, while Tanzania’s progressive tax structure holds potential, more reforms are in need to boost implementation alongside widening the tax base. Further, the study concluded that there is little wealth-related taxation in Tanzania. Also, assets such as land ownership or financial assets are hardly/not taxed. The study recommended that given the situation, there is a great need to improve the tax collection with a focus on the existing tax base in Tanzania.

Fiscal Incidence of the Property Tax

We use data from Florida spanning a decade (2010–2019) to empirically revisit the topic of fiscal incidence, the difference between benefits received and taxes paid, as it applies to property taxation. We first estimate demand equations in order to calculate the Lindahl tax share, or price the median voter would be willing to pay for public goods. Our measure of fiscal incidence is the difference between the Lindahl tax share and the actual tax share. With the exception of police and fire expenditures, benefits tend to outweigh costs for those with higher incomes, a pattern we attribute to public goods being valued more by high-income residents who pay a modestly progressive property tax. Controlling for income, Hispanic and black residents have higher levels of fiscal incidence. We explore how policy reforms, including equitable property assessment, affects fiscal incidence.

Wealth polarization in western countries

This paper delves into the dynamics of wealth distribution across various countries, utilizing innovative methodologies to uncover patterns of wealth polarization and its determinants. Wealth, distinct from income, reflects long-term economic resources and serves as a crucial indicator of economic well-being. Employing the "relative distribution" method and Recentered Influence Function (RIF) regression, this study examines changes in wealth distribution and the factors driving wealth polarization across eight European countries, Australia, and the United States.The analysis reveals significant heterogeneity in wealth distribution trends among countries, with disparities observed over time. Wealth polarization, akin to income polarization, emerges as a phenomenon distinct from traditional measures of inequality, shedding light on the concentration of wealth within societies. Household composition, demographic factors, and socioeconomic characteristics significantly influence wealth polarization, echoing patterns observed in income polarization studies.The findings underscore the multifaceted nature of wealth distribution dynamics and highlight the need for comprehensive policy interventions to address wealth inequality and polarization. Policy measures such as progressive taxation, regulatory reforms, and asset-building programs for marginalized communities are crucial in fostering equitable wealth distribution and creating inclusive societies.

Challenges in the Implementation of the City Statute's Instruments for Promoting the Social Function of Property

Objective: This study aims to analyze the challenges in implementing the instruments provided by the City Statute, such as compulsory subdivision, building, or use (PEUC), the progressive Urban Property Tax (IPTUp), and expropriation-sanction, in order to promote sustainable urban development and ensure the social function of property. Theoretical Framework: The work is based on theories about urban policies and the social function of property, discussing the importance of these concepts in the context of sustainable urban growth in Brazil. Method: The research adopts a qualitative approach with a literature review and case study analysis in various Brazilian cities. Secondary data were collected from municipal reports, academic studies, and official documents. Results and Discussion: The findings highlight the lack of Master Plans in many municipalities, the absence of complementary legislation, political and judicial resistance, and insufficient technical training as the main obstacles to the effective application of the Statute’s instruments. The analysis suggests the need for investments in technology, revision of Master Plans, and increased community participation to overcome these barriers. Research Implications: The research emphasizes the importance of coordination among different levels of government to promote the social function of property. It is proposed that future studies investigate the social and economic impacts of these policies and explore the integration of new technologies in urban monitoring. Originality/Value: This study contributes to the debate on sustainable urban development in Brazil by identifying specific challenges in the application of the City Statute’s instruments and proposing strategies for their improvement.

Fiscal Policy’s Function in Reducing Economic Downturn

Fiscal policy drives a nation’s economic activity by taxing and spending by the government. It is essential for preventing economic downturns. Generally, it operates as follows: A rise in government spending Business and consumer spending typically decreases during recessions, which lowers the economy’s total demand. The government can spend more on infrastructure, services, and public initiatives to make up for this. Quick economic stimulation results in more demand for goods and services as well as the creation of jobs. Tax Rebates: Lower taxes generate more cash for businesses and consumers alike. More money is available for both individuals and companies to invest in and expand their businesses. It is possible to counteract the drop in private sector demand by increasing spending and investment. Transfer Payments: The government may also raise transfer payments to pay for social security, unemployment insurance, and other welfare programs. These payments shield the purchasing power of those who are adversely affected by the recession and aid in stabilizing the economy. Automatic Stabilizers: Without the need for new legislation, some components of fiscal policy automatically promote economic stabilization. For instance, lower-class and impoverished households benefit from automatic stabilizers that reduce taxes in reaction to slower economic development and falling revenues. Unemployment insurance and progressive income taxes are two instances of these stabilizers. As a result, aggregate demand is sustained. Debt and Budget Deficits: During a recession, the government may have a budget deficit if expenditure exceeds revenue. This may lead to an increase in the national debt, but this is typically justified as a benefit to the economy. The theory is that the economy will eventually recover from the short-term debt increase due to the stimulus’s long-term impacts, improving the country’s financial situation. The Multiplier Effect: The economy may be impacted in a number of ways by the government’s increased expenditure and tax incentives. For example, when the government funds a new infrastructure project, the workers employed to complete it spend their earnings on goods and services, increasing demand and economic activity as well as the profits of themselves and other firms. Generally speaking, the goal of fiscal policy is to boost the economy during recessions in order to lessen their severity and hasten their recovery.

Investigating Consumer’s Attitudes Toward New Carbon Tax Regulation in Indonesia

Abstract The Indonesian Government’s 2021 initiative to curb carbon emissions through carbon tax aims to influence the behavior of firms and consumers, particularly, those reliant on fossil fuels. Simultaneously, the carbon tax is envisaged as a means of generating state income and facilitating environmental investments. This research investigates Indonesian consumers’ attitudes toward the carbon tax through a representative survey, analyzing awareness, acceptance, and support levels as indicators and utilizing Structural Equation Modelling (SEM) with Partial Least Squares (PLS) program. The study explores opinions on the climate crisis and carbon tax, with a focus on Greater Jakarta. Preconceptions of climate change and their influence on attitudes are examined, along with socio-demographic characteristics shaping consumer behaviours. Findings reveal a heightened climate crisis awareness among the participants, however, a quarter remain unaware of the carbon tax enactment. Most consumers accept the tax, recognizing personal and industry responsibility for carbon reduction. Many are willing to contribute with tax rates of 1% to 3%. Policy recommendations include fostering political trust, progressive taxation on fossil fuels, and government incentives for carbon reduction. The study underscores the link between awareness, acceptance, and support for carbon tax implementation, suggesting further research on additional support indicators, including political trust.