Reform of personal incomes and property taxes for the near future[Reforma daní z příjmů a majetku občanů pro blízkou budoucnost]

This discussion paper proposes significant changes in the taxation of personal incomes and property based on systemic approach to Czech tax system, which aim to make the tax system simpler and more efficient in a socially sensitive way and to contribute to the resolution of long-term unsustainability of Czech public finances.The paper introduces the issue to the reader firstly by overall look at Czech tax system, mainly at size and structure of collected taxes. Subsequently it familiarizes the reader with opinions of experts on how a good tax system should look like, what are the main problems of Czech tax system and summarizes recent proposals to change it. The second and main part of the paper presents in detail the proposed significant changes comprising significant increase of property taxes, decrease in taxation of personal incomes while making it simpler and more progressive, increase of housing allowance, which would become the main targeted social allowance, and related changes in the allocation of taxes to public budgets. Last but not least are included also estimated effects of these changes on public budgets and net incomes of households.