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The distributional impact of income tax in Canada and China: 1997‐2005

The distributional impact of income tax in Canada and China: 1997‐2005 Purpose – The purpose of this paper is to examine the distributional impact of personal income tax in Canada and China over the most recent decade. Design/methodology/approach – The Urban Household Survey in China and the Canadian Socio‐Economic Information Management System data are employed. Findings – It was found that, in both Canada and China, the personal income taxes are progressive, that is, tax payments and average tax rates are increasing in the income share of high‐income taxpayers. Research limitations/implications – This paper does not explore the connection between tax progressivity differences and social, political, and cultural differences in the two countries. Practical implications – This paper is of interest to policy makers, economists, and academics, who seek to design an income tax system which can mitigate income inequity efficiently. Given that income taxes have changed in China in recent years, future studies should be conducted to compare the distributional impacts of the new tax system against those of the old tax system. Originality/value – This is the first study of distributional impact of income tax in China. This is also the first study to compare tax distribution between China and a developed country. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Chinese Economic and Foreign Trade Studies Emerald Publishing

The distributional impact of income tax in Canada and China: 1997‐2005

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References (33)

Publisher
Emerald Publishing
Copyright
Copyright © 2010 Emerald Group Publishing Limited. All rights reserved.
ISSN
1754-4408
DOI
10.1108/17544401011052276
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to examine the distributional impact of personal income tax in Canada and China over the most recent decade. Design/methodology/approach – The Urban Household Survey in China and the Canadian Socio‐Economic Information Management System data are employed. Findings – It was found that, in both Canada and China, the personal income taxes are progressive, that is, tax payments and average tax rates are increasing in the income share of high‐income taxpayers. Research limitations/implications – This paper does not explore the connection between tax progressivity differences and social, political, and cultural differences in the two countries. Practical implications – This paper is of interest to policy makers, economists, and academics, who seek to design an income tax system which can mitigate income inequity efficiently. Given that income taxes have changed in China in recent years, future studies should be conducted to compare the distributional impacts of the new tax system against those of the old tax system. Originality/value – This is the first study of distributional impact of income tax in China. This is also the first study to compare tax distribution between China and a developed country.

Journal

Journal of Chinese Economic and Foreign Trade Studies – Emerald Publishing

Published: Jun 22, 2010

Keywords: Income tax; Canada; China; National economy

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