Time Has Come For Dual Income Taxation?

After the release of the US tax reform plan, the paper of Peter Birch Sorensen (from the University of Copenhagen) gained a new momentum. The paper deals with the dual income tax system, which is a system that combines a progressive tax schedule for labour income with a low flat tax rate on capital income and corporate income. We should note tat the Nordic experience has been valuble to understand the advantages of this type of system. The paper restates the case for the dual income tax and discusses alternative methods of taxing business income under such a tax system, paying special attention to the taxation of income from closely held corporations. If you are interested read Dual Income Taxation: Why and How?" (September 2005). CESifo Working Paper Series No. 1551