Correlation between inflation and tax, an analysis about income tax in Turkey (1970-1999)

Inflation is described as the continuous and effective increase in general level of price owing to the exceeding aggregate supply of aggregate demand. As affecting negatively, the other institution of the economy, inflations has also negative impacts on tax system and tax revenue. Inflations affect tax types in tax system in different ways. Inflation increases tax burden of the payer and constitutes on in just revenue for government by damaging progressive of income tax. However; in the period of inflation tax and seigniorage revenue; on the other hand, tax revenue is reduced due to the lateness in tax yield. Nevertheless, inflations as having impacts on taxation, taxations have impact on inflation as well. Government use tax policy to cape with inflation. This also constitutes the other side of relation between tax and inflation. In this study, both side of relation between tax and inflations is examined. Nevertheless; regulations for removing the negative effect of inflations on tax system, is also discussed.