Tax rate to maximize the revenue: Laffer curve for the Czech Republic

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216305%3A26510%2F12%3APU99079" target="_blank" >RIV/00216305:26510/12:PU99079 - isvavai.cz</a>

Výsledek na webu

<a href="https://acta.mendelu.cz/60/4/0189/" target="_blank" >https://acta.mendelu.cz/60/4/0189/</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.11118/actaun201260040189" target="_blank" >10.11118/actaun201260040189</a>

Jazyk výsledku

angličtina

Název v původním jazyce

Tax rate to maximize the revenue: Laffer curve for the Czech Republic

Popis výsledku v původním jazyce

The aim of this article is to model the relationship between the rate of personal income tax and the revenue it generates, and to derive a tax rate that would maximize this revenue within the Czech Republic, using methodologies described in earlier works (Hsing, 1996). This tax rate represents an upper limit. Overstepping it has negative consequences for corporate fi nances and government budgetary funding alike, because it undermines the workers motivation to work, reduces buying power, and shifts work activities in favor of gray economy. The period of interest is a time series from 1993 to 2010. Two models were devised. The basic research instrument was a second-degree polynomial regression with a logarithmic transformation of the input data. The explaining variable was the tax revenue, the explanatory variable in Model 1 was the ratio of tax revenue to personal gross annual income. Model 2 featured the ratio of tax revenue to gross domestic product. To limit model instability, all data was stated per capita, in 2010 prices. Both models are statistically signifi cant. By comparison, it was determined that, in the period of 1994–2010, the historical tax rate was lower than the rate designed to maximize the revenue. It approached the theoretical optimum most closely in 2007, and deviated from it most severely in 1995.

Název v anglickém jazyce

Tax rate to maximize the revenue: Laffer curve for the Czech Republic

Popis výsledku anglicky

The aim of this article is to model the relationship between the rate of personal income tax and the revenue it generates, and to derive a tax rate that would maximize this revenue within the Czech Republic, using methodologies described in earlier works (Hsing, 1996). This tax rate represents an upper limit. Overstepping it has negative consequences for corporate fi nances and government budgetary funding alike, because it undermines the workers motivation to work, reduces buying power, and shifts work activities in favor of gray economy. The period of interest is a time series from 1993 to 2010. Two models were devised. The basic research instrument was a second-degree polynomial regression with a logarithmic transformation of the input data. The explaining variable was the tax revenue, the explanatory variable in Model 1 was the ratio of tax revenue to personal gross annual income. Model 2 featured the ratio of tax revenue to gross domestic product. To limit model instability, all data was stated per capita, in 2010 prices. Both models are statistically signifi cant. By comparison, it was determined that, in the period of 1994–2010, the historical tax rate was lower than the rate designed to maximize the revenue. It approached the theoretical optimum most closely in 2007, and deviated from it most severely in 1995.

Druh

J_ost - Ostatní články v recenzovaných periodicích

CEP obor

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OECD FORD obor

50602 - Public administration

Projekt

<a href="/cs/project/MEB0810138" target="_blank" >MEB0810138: Vliv finančních trhů na finanční řízení podniků v ČR a SR v podmínkách globalizace</a><br>

Návaznosti

P - Projekt vyzkumu a vyvoje financovany z verejnych zdroju (s odkazem do CEP)<br>S - Specificky vyzkum na vysokych skolach

Rok uplatnění

2012

Kód důvěrnosti údajů

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

Název periodika

Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis

ISSN

1211-8516

e-ISSN

2464-8310

Svazek periodika

LX

Číslo periodika v rámci svazku

4

Stát vydavatele periodika

CZ - Česká republika

Počet stran výsledku

6

Strana od-do

189-194

Kód UT WoS článku

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EID výsledku v databázi Scopus

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