The Personal Income Tax Equation: Rate Structure and Tax Base

13 Pages Posted: 13 Aug 2009

See all articles by Ralph B. Tower

Ralph B. Tower

Wake Forest University

Fred M. Scully

affiliation not provided to SSRN

Date Written: August, 12 2009

Abstract

Policymakers continue to debate the most appropriate way to tax personal income. Because these taxes are a major revenue source, the strategy adopted has important political implications. Unfortunately public discourse can be clouded by a lack of understanding of rate structure and tax base design. The purpose this report is to identify the defining characteristics and to explore the ways the states link them together. The paper provides an overview of tax rate structures and tax base prototypes and identifies dominant designs. The article then explores the strategic implications of no-tax and low-tax regimes and looks at current issues arising from federal legislation.

Keywords: Personal Income Tax, Rate Structure, Tax Base Design

JEL Classification: D 31, H71

Suggested Citation

Tower, Ralph B. and Scully, Fred M., The Personal Income Tax Equation: Rate Structure and Tax Base (August, 12 2009). State Tax Notes, Vol. 35, No. 11, 2005, Available at SSRN: https://ssrn.com/abstract=1448163

Ralph B. Tower (Contact Author)

Wake Forest University ( email )

2601 Wake Forest Road
Winston-Salem, NC 27109
United States

Fred M. Scully

affiliation not provided to SSRN ( email )

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