Does political orientation affect economic indicators in the Czech Republic?

Michal Krajňák, Kateřina Krzikallová and Václav Friedrich

Journal of Policy Modeling, 2022, vol. 44, issue 6, 1219-1231

Abstract: The article evaluates the relationship between the tax burden on labor and magic quadrangle indicators in the Czech Republic in the years 1993 through 2020. The article examines whether indicators such as the effective rate or tax rate on labor affect the macro-economic indicators of the magic quadrangle. The originality of this study lies in the fact that it deals with the influence of political factors. The analysis shows the strongest correlation between the growth of gross domestic product and the implicit tax rate on labor. Moreover, the study finds that the factor with the most significant – and surprising – bearing on the findings is that fact that right-wing Parliament behaved like left-wing parties. The conclusions reached by this study further underline the significance of the tax burden on labor on the selected magic quadrangle indicators.

Keywords: Personal income tax; Effective tax rate; Magical quadrangle; Implicit tax rate on labor; Political orientation (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jpolmo:v:44:y:2022:i:6:p:1219-1231

DOI: 10.1016/j.jpolmod.2022.10.001

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