Why post-communist countries choose the flat tax: A comparative welfare approach
| Autor: | Stoyan Tanchev, Gancho Todorov Ganchev |
|---|---|
| Přispěvatelé: | Gancho Todorov Ganchev, Stoyan Tanchev |
| Rok vydání: | 2019 |
| Předmět: |
Economics and Econometrics
Flat tax Public economics Post-Communist economies media_common.quotation_subject Abandonment (legal) diminishing marginal utility of income 05 social sciences Social welfare function Probit model 0502 economics and business Economics 050207 economics social welfare function Marginal utility Welfare 050203 business & management proportional taxation media_common Social policy Panel data |
| Zdroj: | Acta Oeconomica. 69:41-62 |
| ISSN: | 1588-2659 0001-6373 |
| Popis: | Our aim is to explain why the post-communist countries were inclined to implement proportional income taxation schemes, given the broad variety of personal tax regimes and rates applied in the rest of the world. To resolve this problem a new type of social welfare function, allowing for variable (including negative) marginal utility of income, is introduced. This new approach improves our ability to comprehend the communist and post-communist social policy attitudes from a comparative standpoint. To verify our assertions, a probit regression model is applied. The empirical investigation is based on panel data including 42 countries from Europe and Central Asia for the period of 2000–2015. The primary inference is that the decisions to implement flat tax can be explained by the law of diminishing marginal utility of income and some additional policy-related factors. As it concerns the future, a successful catching-up strategy by the post-communist countries creates conditions for gradual abandonment of the flat tax practices. |
| Databáze: | OpenAIRE |
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