Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed.
PART 4 The Economics of the Public Sector
Chapter 12 of 36 The Design of the Tax System
Section 15 of 22
…
An average income tax rate is total taxes paid divided by total income.
A marginal tax rate is the tax rate paid on income over a certain amount.
Suppose the government taxes
· 20 percent of the first $50,000 of income
· 50 percent of all income above $50,000
Under this tax system, a person who makes $60,000 pays a total tax of $15,000
· 20 percent of the first $50,000 = $10,000
· 50 percent of the next $10,000 = $5,000
For this person
· the average tax rate is $15,000 / $60,000, or 25 percent
· the marginal tax rate, on income over $50,000, is 50 percent
… …
Other possible income tax systems include:
Flat tax, same percentage of income tax for all earners.
List of countries that use a flat tax for income tax (ao 250114).
ChatGPT:
Here is a list of countries that are known to employ a flat tax system for personal income tax as of my last update:
Russia - A flat rate of 13%, which is among the lower flat tax rates globally.
Hungary - Utilizes a single flat rate for personal income, set at 15%.
Bulgaria - Has a flat tax rate of 10%, one of the lowest in Europe.
Romania - Applies a flat tax rate of 10% on personal income.
Lithuania - Features a flat tax rate, which is set at 20%.
Estonia - Known for its flat tax system, currently at 20%.
Latvia - Implements a flat rate of 20% on personal income.
Czech Republic - Utilizes a flat tax rate system, though it incorporates a solidarity surcharge for higher income brackets.
Slovakia - Has a 19% flat rate for personal income tax.
Montenegro - Features a flat rate of 9%, among the lowest flat tax rates.
These flat tax systems vary slightly in specifics such as deductions and exemptions, which can affect their practical impact on different income groups. They often reflect broader economic policies aimed at simplifying taxation and encouraging investment and economic activity.
…
Consumption tax (sales tax and/or value added tax) to replace income tax
Does any country use as consumption tax (sales tax) and/or value added tax to replace income tax?
ChatGPT:
Some countries heavily rely on consumption taxes, such as sales taxes or value-added taxes (VAT), and have low or no income taxes, effectively using these consumption-based taxes as their primary source of government revenue.
One notable example is countries that use a Value-Added Tax (VAT) system to cover a significant portion of their national budget, reducing or eliminating the need for a traditional income tax.
Notable Examples:
United Arab Emirates and other Gulf Cooperation Council (GCC) countries:
Many of these countries have traditionally had no personal income tax and have funded their budgets primarily through oil revenues and consumption taxes like VAT.
For example, the UAE introduced VAT in 2018 at a rate of 5% as a move towards less dependence on oil revenues.
Bahamas: This country relies heavily on tariffs and taxes on goods and services, including a VAT of 12%, instead of income taxes to fund government services.
Monaco: While Monaco does not have a general sales tax, it does not levy personal income tax on residents and instead generates revenue through other forms of taxation and fees, including VAT, which is aligned with France's rates due to economic agreements.
These systems show a different approach where consumption taxes play a central role in the fiscal structure, especially in countries with significant revenues from other sources like natural resources or tourism.
However, even in these cases, it's rare to find a country that funds all government spending solely through consumption taxes without any form of income tax or significant revenue from natural resources.
… …
natural resources
tennen shigen
天然資源
Comments
Post a Comment