Flat-rate personal income tax in Lithuania, Romania and Hungary: A revolutionary policy idea without revolutionary outcomes

Kovács, Borbála

doi:10.1177/09589287211035707

Cited by 2 publications

(1 citation statement)

References 22 publications

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“…138/2004, introducing the flat tax and other fiscal measures. In the race to adopt and implement a flat PIT rapidly, the Popescu-Tăriceanu government infringed the tax code stipulations requiring a six-month waiting period for tax policy changes [44,45]. Thus, the changes took effect only three days later.…”

Section: The Path To Flat Personal-income Taxation In Romaniamentioning

confidence: 99%

Understanding Public Support for the Flat-Rate Personal Income Tax in a Post-Communist Context: The Case of Romania

Gheorghiţă

2023

Sustainability

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The overall landscape of personal income taxation (PIT) has changed rapidly in numerous post-communist countries of Central and Eastern Europe (CEE), with the adoption of a form of flat-rate tax. Although the economic consequences of this change have been studied extensively, little is known about public opinion on the topic in these countries. This article aims to shed some light on how public opinion addresses the issue of flat-rate PIT in Romania. Logistic regression analysis is used to assess the impact of self-interest, education, age, gender, ideology, political trust, social solidarity, and political knowledge on public support for flat-rate PIT, based on survey data (N = 1105) from the Romanian Election Study (RES). The results suggest that high-income earners, women, and those with higher levels of political trust are more likely to support flat-rate PIT, while higher levels of social solidarity and more education increase the chances of being reluctant about it. Furthermore, the analysis finds no evidence that age, ideology, or political knowledge have an influence on people’s fiscal preferences. The article’s findings provide lessons for policymakers on how fiscal preferences arise and may evolve in a post-communist context, particularly in relation to recurring societal crises.

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Section: The Path To Flat Personal-income Taxation In Romaniamentioning

confidence: 99%

Understanding Public Support for the Flat-Rate Personal Income Tax in a Post-Communist Context: The Case of Romania

Gheorghiţă

2023

Sustainability

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Scenarios of personal income tax reform in the context of reducing income inequality in Ukraine

SOKOLOVSKA¹,

RAINOVA²

2023

Fìnansi Ukr.

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Introduction. The aggravation of the problem of inequality and poverty in the conditions of Russia’s full-scale war against Ukraine determines giving priority to its mitigation in the period of post-war reconstruction. At the same time, ensuring the reduction of income inequality in the period after the termination or abolition of martial law is expected to be achieved by using the redistributive role of taxes, primarily personal income tax. Problem Statement. Although a progressive income tax is considered to be one of the main tools for reducing inequality, a proportional personal income tax can also increase the progressivity of taxation through a well-designed mechanism of tax-exempt amount. The purpose of the article is to analyze the state of fulfillment of the function of reducing income inequality by the personal income tax in Ukraine and ways to increase its redistributive properties. Methods. The redistributive properties of personal income tax were studied by determining the impact of the tax social benefit before and after its reform on the tax burden at different levels of income, which was calculated on the basis of effective personal income tax rates. The assessment of the fiscal consequences of the proposed reforms was carried out using information from the Pension Fund of Ukraine on the number of people receiving wages in a certain income range. Results. It was established that the flat personal income tax in Ukraine does not fulfill the function of reducing income inequality due to existing restrictions on the right to apply the tax social benefit, which cannot be used even by the recipients of the minimum wage. This creates the problem of a high tax burden on people with low incomes. In order to increase the impact of the tax on income redistribution, the feasibility of introducing in Ukraine a differentiated tax social benefit for the taxpayer, as well as a tax social benefit for dependents (wife/husband and children) is substantiated. Another option for increasing the progression in personal income taxation was considered – the introduction of a low-progressive/progressive tax model in combination with the existing and differentiated tax social benefit. Conclusions. An assessment of the impact of the proposed personal income tax reforms on the tax burden at different levels of income, as well as their fiscal consequences, was carried out. Possible risks, as well as the procedure for reforming the tax, are substantiated.

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Flat-rate personal income tax in Lithuania, Romania and Hungary: A revolutionary policy idea without revolutionary outcomes

Cited by 2 publications

References 22 publications

Understanding Public Support for the Flat-Rate Personal Income Tax in a Post-Communist Context: The Case of Romania

Understanding Public Support for the Flat-Rate Personal Income Tax in a Post-Communist Context: The Case of Romania

Scenarios of personal income tax reform in the context of reducing income inequality in Ukraine

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