Publication detail

Estimating Tax Progressivity in Developing Countries: The Plato Index

Author(s): doc. Petr Janský Ph.D., Alex Cobham, Edmund FitzGerald
Type: IES Working Papers
Year: 2021
Number: 35
Published in: IES Working Papers 35/2021
Publishing place: Prague
Keywords: direct taxation, tax progressivity, developing countries, fiscal incidence, social protection
JEL codes: D12, H23, I32, O15
Suggested Citation: Cobham A., FitzGerald E. and Janský P. (2021): "Estimating Tax Progressivity in Developing Countries: The Plato Index" IES Working Papers 35/2021. IES FSV. Charles University.
Abstract: Progressive direct taxation is necessary to complement social protection, in order to reduce income inequality as well as poverty. A new metric of personal income tax incidence progressivity (the ‘Plato Index’) is presented, using WIDER databases for income inequality (WIID) and tax revenues (GDR). Taxation is shown to be far less progressive in developing countries, than in developed ones (particularly Europe) although there are large variations within regional and income groups. There is significant correlation of direct tax progressivity not only with the level of economic development, but also with health and education provision. Both findings imply potential policy space for higher personal income tax pressure.
Downloadable: wp_2021_35_cobham, fitzgerald, jansky




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