Introduction to personal income taxation

This technical note gives an introduction to personal income taxes. The note considers the income tax in different countries from the viewpoint of an individual who is generating income only within the borders of their country. The overall objective of this content is to familiarize the reader with the personal income tax, its main components, and how countries tax different income sources. For this purpose, income tax calculations for the case of Spain, the United States, and Germany are shown with stylized examples. With the help of this note, readers will understand the basics of income taxation and become familiar with marginal and average tax rate calculations.