The dual tax as a flat tax with a surtax on labour income

• Autores: José María Durán Cabré
• Localización: Papeles de trabajo del Instituto de Estudios Fiscales. Serie economía, ISSN 1578-0252, Nº 4, 2003, págs. 3-39
• Idioma: inglés
• Enlaces
  • Texto completo (pdf)
• Resumen

  • Flat tax and dual tax are alternative models for traditional global income taxes with progressive rates. Although there are significant differences between them, a dual tax characterised by a general base, where all income is taxed at a proportional rate, and a personal base, composed only of labour income and taxed according to a progressive schedule that includes a wide zero-rate bracket, could be deemed a flat tax with a surtax on high labour income. A microsimulation exercise applied to Spain confirms that under equal-yield assumption most individuals would only be taxed on the general base, in the same way as a flat tax. The personal base increases progressivity and redistributive effect.