Progressive taxation is considered to be the most popular measure to reduce income inequality. The aim of the conducted research was to enlighten this discussion by exploring to what extent the progressiveness of PIT is a decisive factor in reducing income inequality.
With several policy proposals on introducing a progressive taxation model put on the table, the upcoming parliamentary session in Lithuania is sure to become a heavily debated one. In fact, every tenth taxpayer is threatened with higher tax burden as personal income tax might increase from a flat 15%up to 20%.
Piketty’s publication has reignited the debate over taxation. Proponents of higher taxation seized the opportunity to increase taxes. Even some countries of Central Eastern Europe, a region that has traditionally prided itself on flat taxes, have faltered.
