The links between Income Tax and Personal Income: Case of Kirsehir
Province in Turkey
Abstract
This study aims to answer if a province-specific income tax regime can
promote income per capita in that city. We aim to answer this question
in Kirsehir province setting. Kirsehir is located in Central Anatolia
subregion of Turkey and has one of the lowest contributions to Turkey’s
GDP and been having an income per capita which is close to half of the
national GDP per capita figure. Given its socioeconomic structure, the
city provides an opportunity to investigate the aforementioned research
question. Our major finding is that a city-specific income tax for
Kirsehir can help promoting personal income yet the positive effect can
be maintained for a two-year period. This is a consistent finding that
tax policies can support achieving economic growth only for short run.