ABSTRACT
Recent work by Wagstaff suggests that, in general, tax revenue financing of healthcare in developing countries is at least mildly progressive, and financing from direct taxes (such as income taxes) is more progressive than other financing mechanisms (Wagstaff, 2000). This suggests that higher-income people pay a higher percentage of their income in supporting tax-funded healthcare systems. But the evidence on tax incidence is not entirely clear, as the calculation of tax burden and incidence is very complex. The incidence of a tax measures the final tax burden on people of different income levels taking into account both the indirect effects of the tax (such as how income tax affects wage levels) and the direct effects.
