Amadeo Fuenmayor, member of EvalPub and director of the Regional Taxation Chair at the University of Valencia, has contributed to a recent article on the marginal rate of personal income tax and its influence on the perception of salaries and the tax burden.
The article aims to explain the concept of the marginal personal income tax rate and how it influences the perception of wages and the tax burden. Throughout the text, myths about this tax rate are debunked and a clearer view is offered on how taxes are distributed among different income levels, suggesting that the average rate is a more appropriate measure to assess the progressivity of the tax system.
Amadeo Fuenmayor, Director of the Regional Taxation Chair at the University of Valencia, recommends not comparing the personal income taxation of two different incomes using the marginal rate, but the average rate. This is because the average rate reflects more accurately the percentage of tax paid on total income, taking into account reductions and exemptions for low wages. Fuenmayor points out that, by using the marginal rate, important elements of the tax system are excluded, which may distort the tax comparison.