This paper presents progressivity breakdowns for Croatian personal income tax in 1997 and 2004. The decompositions reveal how the elements of the system – tax schedule, allowances, deductions and credits – contribute to the achievement of progressivity, over the quantiles of pre-tax income distribution. Through the use of ‘single parameter’ Gini indices, the social decision maker’s relatively more or less favorable inclination toward taxpayers in the lower tails of pre-tax income distribution is accounted for. Simulations are undertaken to show how the introduction of a flat-rate system would affect progressivity.personal income tax, progressivity, decomposition
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