The links between Income Tax and Personal Income: Case of Kirsehir Province in Turkey

This study aims to answer if a province-specific income tax regime can promote income per capita in that city. We aim to answer this question in Kirsehir province setting. Kirsehir is located in Central Anatolia subregion of Turkey and has one of the lowest contributions to Turkey’s GDP and been having an income per capita which is close to half of the national GDP per capita figure. Given its socioeconomic structure, the city provides an opportunity to investigate the aforementioned research question. Our major finding is that a city-specific income tax for Kirsehir can help promoting personal income yet the positive effect can be maintained for a two-year period. This is a consistent finding that tax policies can support achieving economic growth only for short run.