Distributional Effects of Tax and Benefit Reforms in the Czech Republic
The Czech Republic has over the past decade carried out two waves of tax and benefit reforms. The first one took place in 2005–2006 during the left-wing government and the second one has been carried out in 2008 by the right-wing government. Using EUSILC data for selected types of households, the paper assesses changes in the distribution of gross incomes and effects of the changes in taxes and benefits on the distribution of incomes after taxes and a provision of social benefits. The analysis is carried out on four types of households with and without children. The analysis is performed using Lorenz curves and Gini coefficients. The results show that the tax system changes the distribution of incomes less significantly than benefits. The 2006 reform reduced the differential between the Gini coefficient for the gross income and the Gini coefficient after taxes and benefits for households with active parents and one child. Reform in 2008 supported families with children and an reduced the differential between the gross income and income after taxes and benefits for different types of families.
[1] L. Vítek, J. Pavel, "Effect of Changes in Taxes and Benefits on Redistribution in the Czech Republic," in Špalková, D. and Furová,
L. (ed.), Modern and Current Trends in the Public Sector Research, Brno : Masarykova univerzita, 2012, pp. 155-163.
[2] J. Ve─ìern├¡k, "Přerozd─ølov├ín├¡ př├¡jm┼» dan─ømi a d├ívkami v ─îR: jeho
prom─øny a reflexe po r. 1989" (Income Redistribution Via Taxes and
Benefits in the CR: Change and Perception after 1989), Finance a ├║v─ør -
Czech Journal of Economics and Finance, vol. 52, no. 1, pp. 4-22, Jan. 2002.
[3] J. Večerník, "Income Taxes and Social Benefits among Czech Employees Changes since 1989 and a Cross-national Comparison,"
Finance a ├║v─ør - Czech Journal of Economics and Finance, vol. 56, no.
1-2, pp. 2-17, Jan. 2006.
[4] M. Sojka, "Transformation, integration and inequality: the case of the Czech Republic," Prague Economic Papers, vol. X, no. 4, 2000.
[5] O. Schneider, T. Jel├¡nek, "Vliv ─ìeského soci├íln├¡ho systému a daňov├¢ch
├║lev na rozd─ølen├¡ př├¡jm┼»" (Czech Social Security and Tax System and Their Impact on the Income Distribution), Finance a ├║v─ør - Czech
Journal of Economics and Finance, vol. 51, no. 12, pp. 639-657, 2001.
[6] O. Schneider, T. Jelínek, "Distributive Impact of Czech Social Security
and Tax Systems: Dynamics in Early 2000s-," Prague Economic
Papers, vol. XIV, no. 3, pp. 221-237, 2005.
[7] T. Sirovátka, M. Valentová, "Legitimita redistribuce: Česká republika
v mezin├írodn├¡m srovn├ín├¡" (Redistribution Legitimacy: Czech Republic in International Comparison), Finance a ├║v─ør - Czech Journal of Economics and Finance, vol. 52, no. 2, pp. 23-35, Jan. 2002.
[8] L. V├¡tek, J. Pavel, "Vliv interakce daňov├¢ch a d├ívkov├¢ch systém┼» na
zv├¢┼íen├¡ motivace k participaci na trhu pr├íce a na rodinné chov├ín├¡, "Research Paper for Ministery of Labour and Social Affairs of the Czech
Republic, Working Document No. 5, pp. 21 - 44, 2011, unpublished.
[9] K. Bhattarai, J. Whalley, "Redistributive Effects of Transfer
Programmes in the United Kingdom," Economica New Series, vol. 76,
no. 303, pp. 413-431, 2009.
[10] C. Moriguchi, E. Saez, "The Evolution of Income Concentration in
Japan-, 1886-2005: Evidence from Income Tax Statistics," The Review of Economics and Statistics, vol. 90, no. 4, pp. 713-734, 2008.
[11] P. J. Ziliak, "Making Work Pay: Changes in Effective Tax Rates and
Guarantees in U.S. Transfer Programs, 1983-2002," The Journal of
Human Resources, vol. 42, no. 3, pp. 619-642, 2007.
[12] T. Piketty, E. Saez, "How Progressive Is the U.S. Federal Tax System?
A Historical and International Perspective," The Journal of Economic Perspectives, vol. 21, no. 1, pp. 3-24, 2007.
[13] I. Garfinkel, L. Rainwater, and M. T. Smeeding, "A Re-examination of Welfare States and Inequality in Rich Nations: How In-kind Transfers and Indirect Taxes Change the Story," Journal of Policy Analysis and Management, vol. 25, no. 4, pp. 897-919, 2006.
[14] M. Hungerbühler, E. Lehmann, A. Parmentier, and B. Linden, “Optimal
Redistributive Taxation in a Search Equilibrium Model,” The Review of
Economic Studies, Vol. 73, No. 3, pp. 743–767, 2006.
[15] European Commission, Income and living conditions in Europe (EUSILC
2009 and older). Luxembourg: Publications Office of the
European Union, 2010.
[16] R. Hindls, S. Hronová, J. Seger, and J. Fischer, Statistika pro ekonomy.
(Statistics for economists). Praha: Professional Publishing, 2008.
[17] M. Medgyesi, “Income Distribution in European Countries: First
Reflections on the Basis of EU-SILC 2005,“ in I. G. Tóth (ed.) Tárki
European Social Report, pp. 88-105. Budapest: Tárki, 2008.
[18] Z. Malá, G. Červená, “Dekompoziční analýza příjmové nerovnosti
v České republice,“ Ekonomická revue – Central European Review of
Economic Issues, vol. 15, pp. 5–14, 2012.
[1] L. Vítek, J. Pavel, "Effect of Changes in Taxes and Benefits on Redistribution in the Czech Republic," in Špalková, D. and Furová,
L. (ed.), Modern and Current Trends in the Public Sector Research, Brno : Masarykova univerzita, 2012, pp. 155-163.
[2] J. Ve─ìern├¡k, "Přerozd─ølov├ín├¡ př├¡jm┼» dan─ømi a d├ívkami v ─îR: jeho
prom─øny a reflexe po r. 1989" (Income Redistribution Via Taxes and
Benefits in the CR: Change and Perception after 1989), Finance a ├║v─ør -
Czech Journal of Economics and Finance, vol. 52, no. 1, pp. 4-22, Jan. 2002.
[3] J. Večerník, "Income Taxes and Social Benefits among Czech Employees Changes since 1989 and a Cross-national Comparison,"
Finance a ├║v─ør - Czech Journal of Economics and Finance, vol. 56, no.
1-2, pp. 2-17, Jan. 2006.
[4] M. Sojka, "Transformation, integration and inequality: the case of the Czech Republic," Prague Economic Papers, vol. X, no. 4, 2000.
[5] O. Schneider, T. Jel├¡nek, "Vliv ─ìeského soci├íln├¡ho systému a daňov├¢ch
├║lev na rozd─ølen├¡ př├¡jm┼»" (Czech Social Security and Tax System and Their Impact on the Income Distribution), Finance a ├║v─ør - Czech
Journal of Economics and Finance, vol. 51, no. 12, pp. 639-657, 2001.
[6] O. Schneider, T. Jelínek, "Distributive Impact of Czech Social Security
and Tax Systems: Dynamics in Early 2000s-," Prague Economic
Papers, vol. XIV, no. 3, pp. 221-237, 2005.
[7] T. Sirovátka, M. Valentová, "Legitimita redistribuce: Česká republika
v mezin├írodn├¡m srovn├ín├¡" (Redistribution Legitimacy: Czech Republic in International Comparison), Finance a ├║v─ør - Czech Journal of Economics and Finance, vol. 52, no. 2, pp. 23-35, Jan. 2002.
[8] L. V├¡tek, J. Pavel, "Vliv interakce daňov├¢ch a d├ívkov├¢ch systém┼» na
zv├¢┼íen├¡ motivace k participaci na trhu pr├íce a na rodinné chov├ín├¡, "Research Paper for Ministery of Labour and Social Affairs of the Czech
Republic, Working Document No. 5, pp. 21 - 44, 2011, unpublished.
[9] K. Bhattarai, J. Whalley, "Redistributive Effects of Transfer
Programmes in the United Kingdom," Economica New Series, vol. 76,
no. 303, pp. 413-431, 2009.
[10] C. Moriguchi, E. Saez, "The Evolution of Income Concentration in
Japan-, 1886-2005: Evidence from Income Tax Statistics," The Review of Economics and Statistics, vol. 90, no. 4, pp. 713-734, 2008.
[11] P. J. Ziliak, "Making Work Pay: Changes in Effective Tax Rates and
Guarantees in U.S. Transfer Programs, 1983-2002," The Journal of
Human Resources, vol. 42, no. 3, pp. 619-642, 2007.
[12] T. Piketty, E. Saez, "How Progressive Is the U.S. Federal Tax System?
A Historical and International Perspective," The Journal of Economic Perspectives, vol. 21, no. 1, pp. 3-24, 2007.
[13] I. Garfinkel, L. Rainwater, and M. T. Smeeding, "A Re-examination of Welfare States and Inequality in Rich Nations: How In-kind Transfers and Indirect Taxes Change the Story," Journal of Policy Analysis and Management, vol. 25, no. 4, pp. 897-919, 2006.
[14] M. Hungerbühler, E. Lehmann, A. Parmentier, and B. Linden, “Optimal
Redistributive Taxation in a Search Equilibrium Model,” The Review of
Economic Studies, Vol. 73, No. 3, pp. 743–767, 2006.
[15] European Commission, Income and living conditions in Europe (EUSILC
2009 and older). Luxembourg: Publications Office of the
European Union, 2010.
[16] R. Hindls, S. Hronová, J. Seger, and J. Fischer, Statistika pro ekonomy.
(Statistics for economists). Praha: Professional Publishing, 2008.
[17] M. Medgyesi, “Income Distribution in European Countries: First
Reflections on the Basis of EU-SILC 2005,“ in I. G. Tóth (ed.) Tárki
European Social Report, pp. 88-105. Budapest: Tárki, 2008.
[18] Z. Malá, G. Červená, “Dekompoziční analýza příjmové nerovnosti
v České republice,“ Ekonomická revue – Central European Review of
Economic Issues, vol. 15, pp. 5–14, 2012.
@article{"International Journal of Business, Human and Social Sciences:50840", author = "L. Vítek", title = "Distributional Effects of Tax and Benefit Reforms in the Czech Republic", abstract = "The Czech Republic has over the past decade carried out two waves of tax and benefit reforms. The first one took place in 2005–2006 during the left-wing government and the second one has been carried out in 2008 by the right-wing government. Using EUSILC data for selected types of households, the paper assesses changes in the distribution of gross incomes and effects of the changes in taxes and benefits on the distribution of incomes after taxes and a provision of social benefits. The analysis is carried out on four types of households with and without children. The analysis is performed using Lorenz curves and Gini coefficients. The results show that the tax system changes the distribution of incomes less significantly than benefits. The 2006 reform reduced the differential between the Gini coefficient for the gross income and the Gini coefficient after taxes and benefits for households with active parents and one child. Reform in 2008 supported families with children and an reduced the differential between the gross income and income after taxes and benefits for different types of families.
", keywords = "Czech Republic, redistribution, tax reforms.", volume = "6", number = "11", pages = "2785-7", }
