The status and current issues of personal income tax systems in developed countries

For employers, personal income tax is perhaps the best-known type of tax. The reason is clear: employers are subjects of this tax both in conjunction with payroll earnings and capital income taxation. With private entities, the involvement of states from this respect is substantially broader in scope. Among the many related aspects, the financing of public tasks, the improvement of a country's competitiveness and the diminishing or elimination of income gaps are just a few key elements. Personal income tax indeed plays an extremely important role in our lives. To understand the arguments and debates which accompany the transformation of the personal income tax system of a country, we need to review and understand the evolution of the tax form in specific countries. After presenting the developments regarding incomes, this study focuses on the key challenges that governments should take into account and the potential responses to those challenges.