Progressive Tax Reforms in Flat Tax Countries

Barrios, Salvador; Ivaškaitė-Tamošiūnė, Viginta; Maftei, Anamaria; Narazani, Edlira; Varga, János

doi:10.1080/00128775.2019.1671201

Cited by 30 publications

(19 citation statements)

References 29 publications

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“…Although the impact is modest, our findings highlight the beneficial impact of a progressive taxation on income inequalities in comparison to the current 10% flat-rate tax system applied in Romania. Our results are consistent with the international literature review [27,28], indicating that a change in the personal income tax policy regime is generally expected to be modest but positive, as the progressive tax-benefit system assures a better consideration for the needs of poorer households as compared to the rest of the household income distribution.…”

Section: Discussionsupporting

confidence: 90%

“…However, there are numerous studies that argue that these effects are not very intense (see for instance [27,28], among others). With regard to the household sector, the most important adverse effects of progressive taxation are related to labor supply, saving behavior and the avoidance of paying taxes.…”

Section: Literature Reviewmentioning

confidence: 99%

“…The study of [27] analyzes the fiscal, redistributive, and macroeconomic impact of introducing or reintroducing a progressive tax regime in a number of Central and Eastern European countries with flat-rate tax systems. The analysis uses microsimulation and macroeconomic models (QUEST model) and shows that a progressive tax system reduces income inequalities, but has a rather small effect on the macroeconomic level (GDP (Gross Domestic Product)) and employment.…”

Section: Literature Reviewmentioning

confidence: 99%

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Flat-Rate versus Progressive Taxation? An Impact Evaluation Study for the Case of Romania

et al. 2019

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Taking into consideration the recent debates on adopting a progressive tax system over the flat-rate taxation, our paper aims to investigate the impact of a change in the current Romanian personal income tax policy system from the 10% flat-rate tax system to some alternative progressive taxation scenarios. The methodological approach consisted in using the European Union Survey on Income and Living Conditions (EU-SILC) database to micro-simulate the impact upon poverty and income inequality. Through our ex-ante tax policy analysis we bring empirical evidence of a modest, but positive effect upon poverty rate and income inequalities in favor of a progressive taxation system. However, when looking at the government financial implications through the personal income tax budget revenues, we discuss upon the possible trade-off between the benefits on poverty and income inequalities and the possible budgetary drawbacks. Despite the data limitations, this study has the benefit of being among the first attempts to evaluate the impact of a personal income tax policy reform for the case of Romania.

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Section: Discussionsupporting

confidence: 90%

Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

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Flat-Rate versus Progressive Taxation? An Impact Evaluation Study for the Case of Romania

et al. 2019

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“…Finally, most recent literature motivated by the rising inequality of some of the Central and Eastern European countries have started analysing effects of introducing progressive tax schedules in these economies. Using EUROMOD microsimulation framework and macro model paper by Salvador Barrios et al (2020) analyze fiscal, redistributive and macroeconomic impact of several progressive tax scenarios in Bulgaria, Estonia, Latvia, Lithuania, Hungary and Romania. They find positive effects on redistribution and inequaity in all countries.…”

Section: Using Microsimulation Models In Tax Policy Analysis: a Survey Of The Existing Literaturementioning

confidence: 99%

Tax reforms and income inequality in former Yugoslav countries: Escaping the avant-garde neoliberalism in the income tax policy

Rakić

Vladisavljević

2021

Panoeconomicus

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After the breakup of former Yugoslavia Croatia, Serbia and Slovenia followed different income tax reform trajectories that could explain currently different levels of income inequality in these countries. Our paper analyzes redistributive effects of introducing progressive tax systems, like the ones currently implemented in Slovenia and Croatia, in the Serbian context. Using microsimulation modeling and Survey on Income and Living Conditions data for 2017 our results suggest that implementation of both Croatian and Slovenian tax system would yield lower levels of income inequality and poverty if applied in Serbia. Slovenian system achieves larger decrease in inequality due to higher tax burden on the top incomes and brings significant increase in tax revenues. Croatian tax schedule achieves stronger decrease in poverty as more generous personal allowance exempt higher portions of low incomes from labour taxes.

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“…In addition, there is each spouse as a separate taxpayer and social insurance contributions are 18.5% of income for employees (National Tax and Customs Administration of Hungary, 2018). It should be noted that Romania and Bulgaria have a flat personal income tax (PIT) rate like Hungary (Barrios, et al 2018). According to the current tax rules of the Republic of Belarus (Tax code of the Republic of Belarus, 2017), they have personal income tax at a fixed rate: Income from employment -9%; individual entrepreneurs applying the General tax regime -16%; revenue from prizes received from gambling organizers is -4%.…”

Section: Proportionate Income Taxationmentioning

confidence: 99%

Optimality of Tax Policy on the Basis of Comparative Analysis of Income Taxation

Abuselidze¹

2020

EJSD

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This paper is to determine the optimality of taxation based on a comparative analysis of income taxation in developed and developing countries. In our opinion, the main idea of income tax should be the optimal distribution of tax literacy on the basis of a direct definition of income of taxpayers or progressive taxation. The theoretical and methodological basis of the research is the main provisions of the market economy, classical and modern tax theories, legislative and regulatory acts of foreign countries. The main part of the empirical material is from 2002 to 2017. In the process of analysis of the actual material, together with the general scientific method of research, is used: Comparative and systemic analysis, analogy, statistical data monitoring and other methods. The comparative and systemic analysis will give us an opportunity to reveal and evaluate the ways of perfection. Analogy and comparative analysis is based on variables and features, such as the of income taxes structure, withdrawal rules, rates, tax base. Statistic concept tries to explain the named phenomena by the way of fundamental analyzing of the statistic data received resulted multiple statistic observation. Previous analyses of tax rates tend to support the hypothesis that Developed countries emphasize the importance of fairness, while developing countries are mainly focused on mobilizing budget revenues and lesser consideration of fair taxation principles, since the tax system performs a fiscal function more effectively than developing countries. Keywords: Tax policy, income tax, tax burden, budget, well-being

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Progressive Tax Reforms in Flat Tax Countries

Cited by 30 publications

References 29 publications

Flat-Rate versus Progressive Taxation? An Impact Evaluation Study for the Case of Romania

Flat-Rate versus Progressive Taxation? An Impact Evaluation Study for the Case of Romania

Tax reforms and income inequality in former Yugoslav countries: Escaping the avant-garde neoliberalism in the income tax policy

Optimality of Tax Policy on the Basis of Comparative Analysis of Income Taxation

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