Taxes and the incentive to work under flat and progressive tax systems in Slovakia

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F70883521%3A28120%2F21%3A63530978" target="_blank" >RIV/70883521:28120/21:63530978 - isvavai.cz</a>

Result on the web

<a href="https://www.economics-sociology.eu/files/2E_995_Nadirov%20et%20al.pdf" target="_blank" >https://www.economics-sociology.eu/files/2E_995_Nadirov%20et%20al.pdf</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.14254/2071-789X.2021/14-2/2" target="_blank" >10.14254/2071-789X.2021/14-2/2</a>

Result language

angličtina

Original language name

Taxes and the incentive to work under flat and progressive tax systems in Slovakia

Original language description

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.

Czech name

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Czech description

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Type

J_SC - Article in a specialist periodical, which is included in the SCOPUS database

CEP classification

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OECD FORD branch

50206 - Finance

Project

—

Continuities

V - Vyzkumna aktivita podporovana z jinych verejnych zdroju

Publication year

2021

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Economics and Sociology

ISSN

2071-789X

e-ISSN

—

Volume of the periodical

14

Issue of the periodical within the volume

2

Country of publishing house

UA - UKRAINE

Number of pages

16

Pages from-to

40-55

UT code for WoS article

000672183100002

EID of the result in the Scopus database

2-s2.0-85109011199