Income inequality and progressive income taxation in China and India, 1986-2015

Thomas Piketty*, Nancy Qian

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

42 Scopus citations

Abstract

This paper evaluates income tax reforms in China and India. The combination of fast income growth and under-indexed tax schedule in China implies the fraction of the Chinese population subject to income tax has increased from less than 0.1 percent in 1986 to about 20 percent in 2008, while it has stagnated around 2-3 percent in India. Chinese income tax revenues, as a share of GDP, increased from less than 0.1 percent in 1986 to about 1.5 percent in 2005 and 2.5 percent in 2008, while the constant adaptation of exemption levels and income brackets in India have caused them to stagnate around 0.5 percent of GDP.

Original languageEnglish (US)
Pages (from-to)53-63
Number of pages11
JournalAmerican Economic Journal: Applied Economics
Volume1
Issue number2
DOIs
StatePublished - Apr 2009

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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