What makes the personal income tax progressive? A comparative analysis forfifteen OECD countries

In this paper, we explore the roles of tax credits, rate structures, allowa nces and deductions in determining the overall progressivity of net income tax liabilities in fifteen OECD countries. Three clusters emerge: (i) the r ate-structure countries, Australia, France, Italy, the Netherlands and Spai n, where the rate effect is the dominant (but notthe only) source of progre ssivity of gross and net tax liabilities; (ii) the allowance countries, the English-speaking countries other than Australia, where allowances are the dominant source of progressivity; and (iii) the mixed structure countries, Belgium, Finland, Germany and Sweden, where roughly half of the progressivi ty of gross tax liabilities is attributable to the rate structure.