In this paper, to evaluate INCOME and distributional effects of PERSONAL INCOME TAX, a hypothetical society is simulated.12 INCOME sources are defined that each member of society can earn INCOME from one INCOME source or more. Then, using FORTRAN programming, the government's TAX INCOME, INCOME distribution and average TAX rate are calculated, assuming five alternative Scenarios: 0. Base scenario: TAXing PERSONAL INCOME at source according to "Direct INCOME TAXes Act"; 1. TAXing the sum of INCOMEs each individual person earns from different businesses he or she owns and exempt his / her business INCOME once; 2. TAXing the sum of INCOMEs each person earns from non-exempt sources and exempt his / her business INCOME once; 3. TAXing the sum of INCOMEs each person earns from exempt and non-exempt sources and exempt his / her business INCOME once; 4. qualifying third scenario by accepting a 1 billion Rials as exemption. Results of simulation indicate that the government's INCOME and INCOME equality is maximized in 3rd scenario.

One of the most important issues in designing a TAX on aggregate PERSONAL INCOME is the specification of TAX rates and brakets. The purpose of this[s1] study is to design the optimal framework of PERSONAL INCOME TAX in terms of TAX rates and brakets and to evaluate its effects. In doing so, microsimulation model is used and required micro data were obtained using the Household Expenditure Survey of Iranian Statistics Center in 2017. [s2] The TAX rates, INCOME brackets, deductions, exemptions, and subsidies to low-INCOME people have been determined in such a way that the best works are determined according to the [s3] gini coefficient and progressivity index, with the restriction of providing current amount of TAX revenue for the government. The results show that by introducing the new PERSONAL INCOME TAX, while maintaining the government's TAX revenues and paying a negative TAX to the low-INCOME, horizontal inequality (measured by the Gini coefficient) and vertical inequality (measured by the Progressivity Index) can be significantly improved.

Abstract According to Article 198 of the Direct TAXes Act, in commercial companies, company managers, collectively or individually, are jointly and severally responsible to the company for paying the company's INCOME TAX that has been final during their management. Based on the principle of the independence of the legal PERSONALity of the managers from the company, the debt of the company can only be claimed from the company itself, as a result, claiming the company's TAX debt from the managers is against the aforementioned legal principle. On the other hand, according to the principle of PERSONAL TAX responsibility, TAX can only be claimed from the TAXpayer, i.e. the company. Article 198 is written in such a way that the joint and several liability of directors is general, absolute, and as a result includes all members of the board of directors, including the signatory directors and others, as well as those who are faulty or not faulty of non-payment of TAXes. Since the ruling on the PERSONAL responsibility of managers for company TAX is against the principles governing corporate law, obligation law, and TAX law, as well as restricting the individual rights of board members and the CEO of the company, the legal analysis of this issue in the framework of the concepts and principles of the legal system in related fields can reveal new angles about the basics of managers' responsibility for corporate TAXes and appropriate legal policy in this matter. The issue that can be raised is whether the provision of Article 198 of the Act is justified from a legal point of view or not. Is it justifiable to impose PERSONAL responsibility on managers for company TAXes, based on the principles of TAX law, obligation law,corporate law, and other related legal fields? What is the ideal legal system for the legal regulation of managers' responsibility for corporate TAXes? The theoretical framework of the research is based on several principles and accepted in related legal fields, including the principle of independence of the legal PERSONALity of managers from the company, the principle of individuality of TAX, the principle of individuality of responsibility, the principle of the ability to pay TAXes, the principle of TAX justice, the principle of ease of TAX collection, The principle of guaranteeing public rights, the moral principle of responsibility, and other relevant principles, and a balance between these principles are organized. The sources of this research are derived from legal principles and principles in related fields, fundamental principles, and the subject of legal consensus, including justice and individual rights, relevant laws and regulations, as well as relevant and useful findings in comparative law. The research method in this article is comparative and the validation of Article 198 of the Act is analyzed, reasoned, and deduced based on the criteria derived from certain legal principles in related legal fields including TAX law, corporate law, public law, and civil liability law. This article tries to prove the hypothesis with legal analysis that the imposition of such responsibility is unjustified and incompatible with the foundations, principles, and integrity of the legal system. Based on the research conducted in this article, the joint and several liability of managers for company TAX, which is very strict against managers to facilitate TAX collection and deal with any possibility of TAX abuse, regardless of the manager's role, authority, and ability to not pay TAX. The imposed TAX is contrary to the desired legal and TAX system and is a clear violation of individual rights and the extensive and unjustified use of public law tools. The main objection is that Article 198 sacrifices the role of fairness, justice, individual rights and freedoms, the moral aspects of the legal system, and the integrity of the legal system without providing the necessary justifications and bases for the expediency of providing TAX revenue for the government. From the point of view of this research, the ideal legal system for defining the responsibility of managers for corporate TAXes is the civil liability system, which uses legal and acceptable elements and takes into account effective factors such as the manager's obligation to pay the company TAX, the manager's fault in paying the TAX, The role and authority of the manager in paying TAXes, the presence or absence of sufficient resources in the company to pay TAXes and other responsibility factors, to establish a fair and efficient system.

In this paper, optimal TAX rates for real and legal entity INCOME TAXes have been estimated. Optimal TAXation means optimal maximization of total utility functions of entities with regard to the budget constraint and a constraint wherein the entities make their choices of labor supply taking into consideration the relationship between labor and INCOME. The foundation of our estimation has been Diamond’s model (1998) which is itself an extended form of Diamond and Myrrless’s model (1971). This model is, in its turn, an adaptation of Saez’s model, an important optimal TAXation model. The statistic population being used for the calculation includes real entities in Tehran and legal entities in Tehran and Kermanshah cities. In order to cover the fairness of INCOME distribution, the statistical data has been classified in terms of INCOME deciles, and Gini coefficient was calculated as an indicator of INCOME distribution variance. Then, an appropriate model which is assumed to have the best impact on the decrease of the Gini coefficient has been selected. Finally, through the application of the selected model and taking into account different levels labor force elasticity (for real entities) and services supply elasticity (for legal entities), the optimal TAX rates have been calculated. The results obtained indicate that in the Iranian TAX system, the application of new rates would lead to a better distribution of INCOME as well as an increase of 150% in the government TAX revenues. Moreover, the calculated rates are able to be interpreted on the basis of an extended formulation of Laffer’s curve.

INCOME TAX and Labour supply is an important part in public sector Economics. INCOME TAX affects labour supply which in turn affects the national INCOME. Economic theory cannot predict the effect of TAX on Labour supply, because are in opposite directions. This research is concerned with the effect substitution and INCOME effects of TAXation on labour supply by an econometric study of cross-sectional data. It is assumed that the effect of TAXation is to alter budget constraints. Because different individuals have different gross wage rates and different amounts of other INCOME, they have different budget constraints. If difference in preferences are adequately controlled for, it is possible to derive labour supply estimates from the cross-sectional data which can then be used as basis for estimating the effect of TAXation. In this study we show that the effects of net wage rate on labour supply is significant, that non wage INCOME is not significant. We finally recommend a policy for TAX refoRm by changing the marginal TAX rate.

The Role of TAXes in reduction of economic inequalities, has been a controversial subject in recent decades. Destructive effects of progressive TAXes on efficiency and problems of TAX compliance, have been considered in TAX reform programs worldwide. Introduction of an Islamic INCOME TAX system, with all its progressive features, and its popularity seems to be effective in correcting the distributive outcomes of existing INCOME TAX system, We have compared the distributive effects of two systems, in this article, and appraised the Khoms, as a major INCOME TAX in Isalm, to replace the corresponding INCOME TAXes, Distributive effects of two systems, were estimated by current TAX incidence approach under four TAX shifting assumptions, Suits index of progressivity, indicates that the proposed replacement in general, improves INCOME distribution. Our estimations indicate that TAX burden of Khoms is lower than that of similar TAXes. In sum, the Khoms system, improves the index of vertical equity, leading to a lesser degree of distortion in economic efficiency.

INCOME TAX does have allocative and distributive roles in economy. So, one of the key roles of INCOME TAX is distributive. The major principle of this type of TAX is "justice principle". This paper uses a modified version of the Engel, Galetovic and Raddatz model to examine the effects of salary TAX on the INCOME distribution in Iran.The findings of the paper confirm that the optimal TAX rates in Iran are 25.18, 28.28, 12.5, 12.5, 12.5 percent, respectively, over the period of the third five-year development plan. Comparing the actual TAX rates with the optimal ones, it is observed that there exists a significant gap between potential and actual TAX rates in the country.

The reform of the TAX system has always been a major concern for economists as well as a major challenge for policymakers. One of the main priorities of the Iranian TAX system is to delve into consideration of obligatory religious payments (Khums) and charity in order to persuade people to pay TAXes as well as to reduce TAX burden. One of the suggestions have been offered in this field is to substitute Khums for the corresponding INCOME TAXes. Khums has a structure the same as TAX on total INCOME with a flat rate. In the present contribution, the economic effects of this suggestion were evaluated. The assessment of TAX proposals is often studied by performing simulations. The present study evaluated and asserted the suggested changes in the PERSONAL INCOME TAX structure in Iran with the features of khums (rate unionization and its post-consumption) via the Dynamic Computable General Equilibrium Model and the Social Accounting Matrix 1390 (2011). The outcomes of the present study showed that the household savings have been declined over a 30-year period, while household consumption and expenses have increased at the same period of time. In other words, current consumption is preferable rather than saving for the future. In spite of increasing consumption, reduction in saving has resulted in lower investment, which ultimately it would cause a decrease in GDP.

Conservatism and TAX avoidance are among firm's policies that can be considered as TAX incentives. Evidence suggests that conservatism is a common and accepted tool for reducing the TAX INCOME. By accepting and noticing this matter, some questions arise: which strategies are used by listed companies in Tehran Stock Exchange to reduce their TAX INCOME, And under circumstances that companies can reduce their TAX INCOME by using conservative accounting would their prefer to use another strategy for TAX avoidance or not? This study examines the influence of TAX INCOME and Conservatism on TAX avoidance. Findings of investigation of 146 firms (1177 firm-years) listed in Tehran Stock Exchange in the 2002 to 2012 by unbalanced Panel model and OLS, suggest by 95% confidence level that relation between TAX INCOME and the Conservatism is negative and significant. This indicates that TAX avoidance and conservatism is mutually exclusive instruments for TAX reduction, so that conservatism is reduced by increasing the incentives for TAX avoidance and vice versa. In addition, the negative relationship between average TAX expression of three years and TAX avoidance indicates that firms tend to be conservative and decline the profit for TAX savings, rather than reduce their TAX by TAX avoidance.