Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/308387 
Authors: 
Year of Publication: 
2024
Series/Report no.: 
CESifo Working Paper No. 11491
Publisher: 
CESifo GmbH, Munich
Abstract: 
In a dual income tax (DIT) system, labor income is taxed progressively, while capital income is subject to a lower proportional tax. DIT systems were introduced in Sweden, Norway, and Finland in the early 1990s. In the absence of rules restricting capital income distributions, owners of closely-held corporations would easily be able to circumvent the progressive tax on earned income by withdrawing an appropriate amount of dividends instead of wages. The Nordic countries adopted very different income splitting models, with immediate implications for the tax treatment of dividends. In this article I first review the principles of the income splitting rules of Sweden, Norway, and Finland. I then discuss some of the trade-offs involved in the design of such rules.
Subjects: 
income taxation
Nordic comparison
dividend taxation
JEL: 
H32
G35
Document Type: 
Working Paper
Appears in Collections:

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.