World income distribution and tax reform : what tax systems do low-income countries need?

This article develops a new method for assessing relative direct tax burdens across all countries, treating the world as a single economic entity and assuming identical preferences across countries. Emperical results show that the new direct tax burden indices are significantly high in low-income countries in comparison with middle and high-income countries. This atricle argues in favour of narrowing the base of income and capital gains tax in low-income countries and a long-term convergence of the tax burden levels across countries. Future research into tax reforms in low-income countries should focus simultaneously on economic growth, quality of life and the natural environment.