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Tax and Welfare Reforms in the Czech Republic—Structural Implications and Challenges

Author

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  • Mr. Thomas Dalsgaard

Abstract

The paper provides an analysis and discussion of key structural implications of the 2007 and 2008 welfare and tax reforms in the Czech Republic. Based on a detailed micro-study of marginal and average effective tax rates for individuals at various points along the earnings curve, it concludes that while incentives to save and invest have improved, work incentives are being severely hampered by high marginal effective tax rates for low- and middle income individuals. The reforms also fail to address the most pressing fiscal concern: to put government finances on a sustainable path.

Suggested Citation

  • Mr. Thomas Dalsgaard, 2008. "Tax and Welfare Reforms in the Czech Republic—Structural Implications and Challenges," IMF Working Papers 2008/052, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2008/052
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    Citations

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    Cited by:

    1. Richard M. Bird & Michael Smart, 2012. "Financing Social Expenditures in Developing Countries: Payroll or Value Added Taxes?," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1206, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    2. Tingyun Chen & Jean-Jacques Hallaert & Alexander Pitt & Haonan Qu & Maximilien Queyranne & Alaina Rhee & Anna Shabunina & Jérôme Vandenbussche & Irene Yackovlev, 2018. "Inequality and Poverty across Generations in the European Union," IMF Staff Discussion Notes 18/01, International Monetary Fund.
    3. Mr. Dennis P Botman & Ms. Anita Tuladhar, 2008. "Tax and Pension Reform in the Czech Republic—Implications for Growth and Debt Sustainability," IMF Working Papers 2008/125, International Monetary Fund.
    4. Leibfritz, Willi, 2011. "Undeclared economic activity in central and eastern Europe -- how taxes contribute and how countries respond to the problem," Policy Research Working Paper Series 5923, The World Bank.
    5. repec:bas:econth:y:2013:i:2:p:3-26 is not listed on IDEAS
    6. Ms. Sònia Muñoz & Céline Allard, 2008. "Challenges to Monetary Policy in the Czech Republic—An Integrated Monetary and Fiscal Analysis," IMF Working Papers 2008/072, International Monetary Fund.
    7. repec:bas:econth:y:2013:i:2:p:27-49 is not listed on IDEAS
    8. Nikolay Galabov, 2009. "The Flat Tax – Theory and Practice," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 3-18.
    9. Marcin Piatkowski & Mariusz Jarmuzek, 2008. "Zero Corporate Income Tax in Moldova: Tax Competition and Its Implications for Eastern Europe," IMF Working Papers 2008/203, International Monetary Fund.
    10. International Monetary Fund, 2010. "Czech Republic: Selected Issues Paper," IMF Staff Country Reports 2010/059, International Monetary Fund.
    11. Zdeněk Hrdlička & Jana Ištvánfyová & Leoš Vítek, 2010. "Systémy účetnictví a evidence daňových příjmů vládních institucí [The System of Accounting for Government Tax Revenues]," Politická ekonomie, Prague University of Economics and Business, vol. 2010(2), pages 253-270.
    12. Nikolay Galabov, 2009. "The Flat Tax – Theory and Practice," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 7, pages 124-137.
    13. Nikolay Galabov, 2012. "Tax Neutrality and Tax Expenses in the Practice of Bulgaria," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 83-104.

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