Developments in the theory of optimal income taxation with applications to the Hungarian tax system

Áron Kiss

No 1317, CERS-IE WORKING PAPERS from Institute of Economics, Centre for Economic and Regional Studies

Abstract: This paper reviews recent developments in the theory of optimal income taxation and draws two broad conclusions with respect to the Hungarian personal income tax system. The first conclusion is that the optimal top marginal tax rate is likely to be higher, perhaps substantially, than the actual rate. The second conclusion is that the optimal tax burden of earnings near the minimum wage is likely to be lower than the actual tax burden. It is discussed how these results depend on the parameters describing labor-supply behavior, the income distribution, and the redistributive preferences of society.

Keywords: optimal income taxation; top income tax rate; Hungary; emerging markets (search for similar items in EconPapers)
JEL-codes: H21 H24 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2013-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: The optimal top marginal tax rate: Application to Hungary (2013)
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