Tax policy and income inequality in the Visegrad countries

Abstract

The financialisation of economies is believed to be the primary cause of the increase in income inequality in the world, occurring on a scale unseen for more than 30 years. One can hypothesise that it is the state that is responsible for the widening inequality, as the state has not sufficiently used the redistributive function of taxation. The purpose of this paper is to study the impact of tax policy on income inequality in Poland, the Czech Republic, Slovakia and Hungary. These so-called Visegrad countries have, in the last several years, carried out some controversial experiments with tax policy, specifically in terms of the flattening of tax progressivity or its replacement with a flat tax, which led to the weakening of the income adjustment mechanism. The imbalance between income tax and consumption tax has contributed to perpetuating income inequality. The verification of tax systems carried out during the recent financial crisis has forced the countries included in this research to implement tax reforms. The introduced changes caused various fiscal and redistributive effects. Analyses show that the changes in income taxation and an increase in the consumption tax rate had the most negative impact on the income and asset situation in Hungary.

Keywords

tax;tax policy;income inequality;Gini coefficient;

Data

Language:	English
Year of publishing:	2015
Typology:	1.01 - Original Scientific Article
Organization:	UM EPF - Faculty of Economics and Business
UDC:	336.22(4-191.2)
COBISS:	12191516
ISSN:	0547-3101
Parent publication:	Naše gospodarstvo
Views:	1011
Downloads:	355
Average score:	0 (0 votes)
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Other data

Secondary language:	Slovenian
Secondary title:	Davčna politika in dohodkovna neenakost v državah Višegrajske skupine
Secondary abstract:	Financializacija gospodarstev naj bi bila poglavitni vzrok za povečanje dohodkovne neenakosti v svetu. Predpostavljamo lahko, da je za širitev neenakosti odgovorna država, ki ni zadostno uporabljala redistributivne funkcije davkov in obdavčitve. Namen tega prispevka je proučiti vpliv davčne politike na dohodkovno neenakost na Poljskem, Češkem, Slovaškem in Madžarskem. Te države, države tako imenovane Višegrajske skupine, so na področju davčne politike izvedle nekaj kontroverznih poskusov. To se nanaša predvsem na izravnavanje davčne progresivnosti ali nadomeščanje te z linearnim obdavčenjem, kar je vodilo do slabitve mehanizma dohodkovnega prilagajanja. Neuravnoteženost davka na dohodek in davka na potrošnjo je prispevala k ohranjanju dohodkovne neenakosti. Verifikacija davčnih sistemov, izvedena med zadnjo finančno krizo, je prisilila proučevane države k uvedbi davčnih reform. Predstavljene spremembe imajo različne fiskalne in prerazdelitvene učinke. Analize kažejo, da imajo spremembe v davkih na dohodek in dvig stopnje davka na potrošnjo najbolj negativne vplive na dohodkovni in premoženjski položaj na Madžarskem.
Secondary keywords:	davki;davčna politika;dohodkovni odnosi;
URN:	URN:NBN:SI
Type (COBISS):	Scientific work
Pages:	str. 12-18
Volume:	ǂVol. ǂ61
Issue:	ǂno. ǂ6
Chronology:	2015
DOI:	10.1515/ngoe-2015-0022
ID:	10878831