Taxes and the Incentive to Work Under Flat and Progressive Tax Systems in Slovakia

• Autorzy: Orkhan Nadirov , Bruce Dehning , Drahomira Pavelkova
• Języki publikacji: EN

Abstrakty

EN

This study examines the impact of taxes on the incentive to work under flat and progressive tax systems. Of particular interest are the changes from progressive-to-flat and flat-to-progressive tax conditions. To measure the impact of taxes on the incentive to work under both scenarios, we relate hours worked with the effective marginal tax rates. Using national accounts data and the Prescott's (2004) labor market model, Slovakian work hours were examined at points in time around the adoption of a flat tax system in 2004 and a progressive tax system in 2013. In Slovakia, there was a transition from a progressive to a flat tax system in 2004, followed by a reversion back to a progressive tax system in 2013. Theoretically, the incentive to work increases when a progressive tax structure is replaced with a flat tax, while the incentive to work decreases in the opposite case. However, the findings show that when Slovakia replaced its progressive tax with a flat one, the actual hours worked decreased, contrary to predictions. When the flat tax was abandoned in favor of a progressive tax structure, hours worked also decreased, but less than when the flat tax was introduced, and significantly less than predicted by the model. (original abstract)

Słowa kluczowe

EN

Flat tax; Progressive tax; Organization of leisure time; Labour market

PL

Podatek liniowy; Podatek progresywny; Organizacja wypoczynku; Rynek pracy

• Czasopismo: Economics & Sociology
• Rocznik: 2021
• Tom: 14
• Numer: nr 2
• Strony: 40--55

Twórcy

autor

Orkhan Nadirov

• ADA University, Baku, Azerbaijan

autor

Bruce Dehning

• Chapman University, Orange, CA United States; Tomas Bata University, Zlin, Czech Republic

autor

Drahomira Pavelkova

• Tomas Bata University in Zlín, Czech Republic

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Identyfikatory

DOI

10.14254/2071-789X.2021/14-2/2