Progressivity and distributive impacts of personal income tax: the case of China and Brazil
Brazilian Journal of Political Economy, Vol. 42 No. 4 (2022), Out-Dez / 2022, Pages 998-1013
This paper aims to evaluate and compare the distributive impact of the personal
income tax (PIT) on individual’s income in Brazil and China by measuring the Gini Index
before and after this tax incidence. The paper also proposes a methodology for transposing
the PIT backets from one country to another. The results show that a more progressive
scheme implemented by China, with more brackets and higher rates, does not guarantee
reduction of inequality, due to the level of income exemption and to the incomes on which
the marginal rates affect. Thus, it can be perceived that the PIT brackets of these two
countries deserves revisions if they seek to fulfill the distributive function.
JEL Classification: E62; H24; N45; N46.
Keywords: Gini index income distribution personal income tax tax progressivity