During the early 1990s the Nordic countries undertook a series of sweeping tax reforms. These reforms combined ambitious base-broadening measures with the introduction of the so-called dual income tax which systematically separates the taxation of labour income from the taxation of capital...

A classic dual income tax is a schedular income tax in which capital income (broadly defined, and including corporate income) is taxed at a relatively low flat rate and labor (and unspecified) income is taxed at higher progressive rates. The Nordic countries, in particular Norway, have pioneered...