World Income Distribution and Tax Reform: Do Low-Income Countries Need Direct Tax System?
journal contributionposted on 08.06.2017, 01:11 by Pillarisetti, J. Ram
Tax reform constitutes one of the core areas of recent economic reform programs in the developing countries. Utilizing new tax burden indexes, this paper argues that a flat or zero income tax creates pro-growth initiatives, reduces corruption and the size of informal sectors and generates over all institutional improvements in low income countries. Tax policy should also balance the growth effects from a flat or zero tax with broad-based consumption and innovative ecologically oriented taxes to ensure sustainability.