Abstract
The paper analyses the revenue-raising, distributional and incentive effects of the personal tax system in Hungary from the start of the transitional tax reforms of 1988 to 1998, and shows that the tax structure has converged to an almost linear form similar to the more heavily taxed EU countries. The 1998 pension reform has reversed a trend increase in average and marginal tax rates but marginal rates still appear too high for a country wishing to encourage growth and employment creation.
Similar content being viewed by others
References
Atkinson, A. B. (1970). “On the Measurement of Inequality.” JET 2, 244-63.
Atkinson, A. B. and J. Micklewright. (1992). Economic Transformation in Eastern Europe and the Distribution of Income. Cambridge: CUP.
Atkinson, A. B. and J. E. Stiglitz. (1980). Lectures on Public Economics. McGraw-Hill.
CSO. (1993). “The Effects of Taxes and Benefits on Household Income, 1991.” Economic Trends No 475. Central Statistical Office. London.
Department of Transport. (1994). The Allocation of Road Track Costs 1994/95. Department of Transport. London.
Dilnot, A. W., J. A. Kay and C. N. Morris. (1984). “The UK Tax System, Structure and Progressivity, 1948-82.” Scand. J. of Economics 80(2), 130-163.
EBRD. (1994). Transition Report 1994. London: European Bank.
Giles, C. and P. Johnson. (1994). “Tax Reform in the UK and Changes in the Progressivity of the Tax System, 1985-95.” Fiscal Studies 15(3), 64-86.
Jarvis, S. and S. Pudney. (1995). “Redistributive Policy in a Transition Economy: The Case of Hungary.” In Newbery (1995d).
Kay, J. A. and M. A. King. (1990). The British Tax System. Fifth edition, Oxford: OUP.
Kornai, János. (1992). “The PostSocialist Transition and the State: Reflections in the Light of Hungarian Fiscal Problems.” American Economic Review 82(2), 1-21.
Kornai, J., and A. Matits. (1985). “The Bureaucratic Redistribution of Firms' Profits.” In J. Kornai and A. Matits, Vision and Reality, Market and State: New Studies on the Socialist Economy and Society. Budapest, Corvina and Hempel Hempstead: Harvester-Wheatsheaf; New York: Routledge.
Long, M. S. and A. Soltesz. (1996). “Taxes and Incentives: An International Comparison.” Mimeo, Rutgers University.
Micklewright, J., and G. Nagy. (1995). “Unemployment Insurance and Incentives in Hungary: Preliminary Evidence.” Ch 6, pp 145-172. In Newbery (1995d).
Mirrlees, J. A. (1971). “An Exploration of the Theory of Optimal Income Taxation.” Review of Economic Studies 38, 175-208.
Mirrlees, J. A. (1978). “Arguments for Public Expenditure.” Ch 9, pp 273-99. In M. Artis and R. Nobay (eds.), Contemporary Economic Analysis. London: Croom-Helm.
Mirrlees, J. A. (1979). “The Theory of Optimal Taxation.” In K. J. Arrow and M. D. Intriligator (eds.), Handbook of Mathematical Economics. Amsterdam: North-Holland.
Newbery, D. M. (1988). “Road User Charges in Britain.” Economic Journal (Conference), 161-176.
Newbery, D. M. (1993). “Tax and Expenditure Policies in Hungary.” The Economics of Transition I(2), 245-72.
Newbery, D.M. (1995a). “The Distributional Impact of Price Changes in Hungary and the UK.” Economic Journal July, 847-63.
Newbery, D. M. (1995b). Reforming Road Taxation. Report published by the Automobile Association.
Newbery, D. M. (1995c). “Tax and Benefit Reform in Central and Eastern Europe.” Ch 1 in Newbery (1995d).
Newbery, D. M. (1995d). (ed). Tax and Benefit Reform in Central and Eastern Europe. London: Centre for Economic Policy Research.
Newbery, D. M. (1997). “Optimal Tax Rates and Tax Design during Systemic Reform.” J. Pub. Econ. 63, 177-206.
Newbery, D. M. and T. Révész. (1995). “The Burden of the Hungarian Personal Tax System.” Working Paper, Department of Applied Economics, Cambridge.
Newbery, D. M. and T. Révész. (1997). “The Burden and Disincentive Effects of the Hungarian Personal Tax System 1988-96.” CEPR Discussion Paper No. 1699, London: Centre for Economic Policy Research.
OECD. (1994). The OECD Jobs Study, Part II: Evidence and Explanations. Paris: OECD.
OECD. (1995a). Social and Labour Market Policies in Hungary. Paris: OECD CCET.
OECD. (1995b). The Tax/Benefit Position of Production Workers 1991-94. Paris: OECD.
Pitti, Z. and J. Vazquez-Caro. (1998). “Tax Administration During the Transition: Coping with Legal Changes and a Shrinking Base.” Ch 18. In L. Bokros and J-J Dethier (eds.), Public Finance Reform during the Transition: The Experience of Hungary. Washington, DC: World Bank.
Pechman, J. and Okner. (1974). Who Bears the Tax Burden? Washington DC: Brookings.
Révész, T. (1994). “An Analysis of the Representiveness of the Hungarian Household Budget Survey Samples.” DPET 9403, Department of Applied Economics, Cambridge.
Stern, Nicholas H. (1976). “On the Specification of Models of Optimal Income Taxation.” Journal of Public Economics 6(1-2), 123-62.
Tóth, I. J. and A. Abrahám. (1996). ”Income Structure and Distribution of the Tax Burden (A study of the personal income tax returns of 1994).” Acta Oeconomica 48(3-4), 271-95.
World Bank. (1994). Averting the Old Age Crisis: Policies to Protect the Old and Promote Growth. Oxford: Oxford University Press.
Rights and permissions
About this article
Cite this article
Newbery, D.M., Révész, T. The Evolution of the Tax Structure of a Reforming Transitional Economy: Hungary 1988–98. International Tax and Public Finance 7, 209–240 (2000). https://doi.org/10.1023/A:1008708621725
Issue Date:
DOI: https://doi.org/10.1023/A:1008708621725