Controversies about the Personal Income Tax

The paper is devoted to the problems, discussed not only in Poland, of defining the proper kind of the personal income tax. Should it be progressive? If so, then to what degree? Or proportional and at what level? The author presents a detailed analysis of the level and structure of the personal income tax burden in Poland in 2001.The arguments of the partisans of replacing the progressive personal income tax with a proportional one are also presented critically examined. Next, reasons for the expediency of the progressive personal income tax are given. Also, attention is drawn to the inadequacy of the tax scale in-force in Poland in the light of the requirements of the tax capacity principle as basic criterion of tax burden distribution. This, in particular, regards the first income bracket that encompasses 95% of the taxpayers. The author presents also the evolution of the government plans for reform of the personal income tax, together with their critical examination.