The Causalities of the Tax Incidence and the Modeling of Tax Processes

• Published in: Procedia economics and finance 2015, Vol.23, p.1253-1259
• Main Authors: Kovárník, Jaroslav, Hamplová, Eva, Jedlička, Pavel, Hájek, Ladislav
• Format: Article
• Language: English
• Subjects: direct tax; indirect tax; tax incidence; tax system; value added tax
• ISSN: 2212-5671; 2212-5671
• DOI: 10.1016/S2212-5671(15)00504-3

Taxation is at the heart of citizens’ relationship with the State. Taxes have significant effect on individual population groups, and become an important political tool as well. Nevertheless, although most countries have adopted similar principles for the operation of their tax system, there remain many differences in the way it is implemented. There are a number of variations in the application of value added taxes and other consumption taxes, including different interpretation of the same or similar concepts. This article is focused on the analysis of the opinions of different groups of inhabitants on the size of the value added tax, on the size of the real estate tax, on the issue of complicated system with lots of exceptions, and on the issue of frequent changes in taxes. The analyzed issue is a part of a broader context which has been solved within the project of specific research conducted by the team from the Department of Economics, Faculty of Informatics and Management, University of Hradec Králové, called “The Causalities of Tax Incidence and the Modeling of Tax Processes”. This project follows another project of specific research called “The Causalities of Tax Incidence”, while the data from this project have been used for the analysis within this article.Most public finance economists acknowledge that nominal tax incidence is not necessarily identical to actual economic burden of the tax, but disagree greatly among each other on the extent to which market forces disturb the nominal tax incidence of various types of taxes under various circumstances.