Publication detail

Labor and Capital Taxation - Theory and Applications to the Czech economy

Author(s): doc. Ing. Ondřej Schneider MPhil., Ph.D., Sali, Martin
PhDr. Jan Zápal Ph.D., Sali, Martin
Type: Articles in journals with impact factor
Year: 2003
Number: 11
ISSN / ISBN: ISSN: 0015-1920
Published in: Finance a úvěr-Czech Journal of Economics and Finance
Publishing place: Prague
Keywords:
JEL codes:
Suggested Citation:
Grants: 402/03/0107 (2002-2004) Czech Tax system and its distribution effects - an empirical analysis
Abstract: The paper deals with the theoretical and practical aspects of the taxation of labor and capital in the Czech Republic. The authors show that if the low flexibility of Czech labor is taken into account, progressive taxation could stimulate a higher supply of labor than would a linear tax. The paper then surveys arguments for and against capital tax and builds a tax incidence model inspired by the Harberger model. The authors demonstrate the theoretical possibilities of tax incidence and apply this to the Czech taxation system. The Czech system seems to tax capital more proportionally than labor, which, as the authors argue, reduces long-term capital accumulation by around 20 %: a substantial loss. The authors thus argue that an alternative tax system might stimulate higher economic growth.
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