Dual income tax: An option for the reform of personal income tax in Serbia?

Abstract

Contemporary tax theory and practice provides two fundamental concepts for taxation of personal income: scheduler and global. Several systems have been derived from these basic models, including combined, flat, dual and negative income tax. Dual income tax, the subject of this paper, requires progressive taxation of income from employment and proportional taxation of income from capital. However, strict application of this system significantly violates the principle of equitability of taxation, both horizontally and vertically.

Keywords

• dual income tax
• labour income
• income from capital
• equitability in taxation
• personal income tax in Nordic countries