VIEWS: 110 PAGES: 6 CATEGORY: Social Sciences POSTED ON: 5/31/2012
[...]within the category of direct taxes, personal income tax typically has a more salutary effect on redistribution than corporate income tax, because corporations often transfer the tax burden to consumers through the prices of the goods or services. [...]when analyzing the equity impact, it is important to distinguish between horizontal equity (equal treatment to those who are in similar circumstances) and vertical equity (up and down the income line). The direct tax burden is more than 10 points higher in OECD countries (14.7 percent of GDP) and the EU (16.1 percent of GDP) than in Latin America, where it represents a meager 5.4 percent of GDP.\n3 Low levels of tax compliance and high rates of evasion are also signifi cant obstacles to achieving more redistributive tax policies in the region.
THE NEXT STEP IN IMPROVING EQUITY TAX REFORM If governments want to continue improv
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