Download Redistributive Effects of Government Programmes. The Chilean by Alejandro Foxley PDF

By Alejandro Foxley

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By Alejandro Foxley

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Annual wage 1 min. 4 Amount tax received (mill. of escudos) Contributions by physical property owners Incomes Net value Net value None By special laws By special laws By special laws Net income Net income ~ I min. annual wage Net income -5 1 min. s ~ of a minimum annual wage Net income S 1 min. monthly wage Net income ~ ] min. 00 Tax rates (070) TABLE 3 structure of laxation in Chile; /969 Property Real estate Others For their wealth Net wealt h tax Lottery income tax Workers and professionals Global income tax (comprehensive) Legal incidence Industry, commerce, mining Small industry and artisans Corporations in Chile Corporations with partial renewal of directory Other types of enterprises Wages, salaries, pensions Honoraries and other remunerations to professionals Professional societies Income as participation of directories in corporations All persons with residence in Chile (individual comprehensive income tax) Income Capital incomes L Direct taxes Type of tax The le~al 50-80 40 5 70 60 (in 0':0) Eva~ion REDISTRIBUTIVE EFFECTS OF GOVERNMENT PROGRAMMES 26 from their legal point of impact and how this affects income 11 distribution.

This final result can be better known and defined if the various tax schemes 43 are grouped together in a common and unique type of tax. This standard constitutes the "optimum" framework for achieving a goal of vertical and horizontal equity which every tax system should aim for. From another point of view, a tax system should cause the smallest number of distortions in the allocation of resources and at the same time 42 By closing loopholes such as those represented by undistributed profits, eliminating unjustified deductions and exemptions, etc.

1. 2. 3. 1* THE INCIDENCE OF TAXATION 29 TABLE 4 -continued 6. 1. 2. 3. 4. 5. 0 7. 1. 2. 3. 4. 5. 6. 7. 8. 5 15 Services subject to general tax rate* ) Banking services Insurance 16 Transport and other* ) Hospital and laundry services Entertainment services Tax on bank interest on loans 17 Other services* ) 8. 1. 2. 3. (Adjustment for nominal import taxes on fiscal sector)* ) 9. 1 10. 1* 11. 6 *Not accounted for in the incidence study at this stage. Notes to Table 4 M Includes all "second-category" income taxation on professionals comprising: monthly retentions, annual reliquidation, patents paid by professionals, and the corresponding share of delayed payments derived from tax liabilities of preceding years figuring also in the 1969 Budget, as second-category tax receipts (Morosos).

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