The Recent Trends in Personal Income Taxation in Poland and in the UK

Abstract

Income taxation raises complex and interesting issues as it may affect individual's savings, work and attitudes towards risk-taking; it also affects the distribution of incomes after tax and before tax - all these questions that are central to the design of tax systems. The concern about the design of the tax system is the same concern that underlines the discussion of striking the correct balance between equity and efficiency, and in particular the problem of minimising excess burden while achieving a socially desirable redistribution of income. In this paper I seek to use economic analysis to examine the Polish and British personal income tax in the last two decades. I try to do this by comparing each part of the tax and examine them using theoretical analysis. In spite of the fact that the personal income tax structures in Poland and in the UK were constructed and developed under different economic conditions, the aim of this paper is to identify some common trends in the personal income taxation in both countries on the example of the reforms introduced in the past and some governmental proposals for the future changes in Poland and in the UK. I also try to answer the question whether the reforms in the personal income tax in Poland and in the UK in the past have provided for equity, certainty, convenience and efficiency.