Understanding Different Tax Systems - Research Paper Example

The concept of modern income taxation is more than twenty years old. Income tax itself can be traced back to the close of the 18th century when income tax originated in Great Britain. By the beginning of the 19th-century income tax was developed in Great Britain as well as in some American States, Sweden, and Germany. For the remainder of the 19th century and the early 20th century, many industrialized nations were subscribing to some form of income taxation. In many of these nations, income tax expansion was a hybrid of finance wars.

During and after World War Two the concept of income tax evolved into a “mass tax” system which corresponded with population sizes and growth in much of the industrialized world.1The evolution and development of income tax have been such that it has become a familiar phrase on a global level. Although there are some countries do not subscribe to a system of income taxation, virtually all countries that are members states to the International Monetary Fund (IMF)2 have some form of income taxation regulatory framework.

3During the period of income taxation development three countries, namely; the United Kingdom, the United States and Germany greatly influenced its growth and development. These three countries have a great influence on most other regulatory systems. As such many other countries are able to trace their respective political, social and legal regimes back to any one or all of these three countries.