Incidence of Jamaican taxes, 1971-1972

The resulting incidence figures are compared with the total income estimated to accrue to households in each income class; this gives the effective rates for each tax and for the tax system as a whole. The focus of this paper is on the estimated burden of taxation borne by each income class, rather than upon the estimation of the distribution of income. Section 2 describes the data from the 1971-72 household budget survey and adjustments to them. Section 3 describes the assumptions and procedures under which the burdens of various taxes were allocated among income brackets. Section 4 summarizes the most important findings of the study, and it presents policy conclusions based upon those findings. Adoption of a general sales tax and repeal of certain other indirect taxes could increase the progressivity of the tax system. In the interest of social justice or equity, the paper recommends that basic food should be exempt from any general sales tax.