The article analyses the redistributive effect attained by personal income tax, social security contributions and social benefits in Slovenia and Croatia. The redistributive effect is decomposed first to reveal progressivity and horizontal inequity effects, and further to show contributions of different tax and benefit instruments. Even though both countries started from the same socioeconomic background two decades ago, the current results reveal divergence that is a consequence of diverse development during this period. The results indicate that Croatia experienced significantly higher pre-fiscal income inequality and lower redistributive effect than Slovenia. Horizontal inequity effects, though, were higher in Slovenia than in Croatia. In both countries, the meanstested social benefits exerted an over-proportionate influence on the vertical effect, suggesting a strong impact of the welfare state on income position of their residents, but also induced a large amount of horizontal inequity. In Slovenia, the non-means-tested benefits slightly increased income inequality
In the article, we model R&D as a major endogenous growth element in a small
open economy general equilibrium framework and consider several R&D policy
scenarios for Slovenia. Increase of the share of sectoral investment in R&D
that is deductible from the corporate income tax and increase of government
spending on R&D turned out to be the most effective suggested policy
measures. While the former policy measure is still followed in part by an
undesired transfer of the tax relief to dividends, a moderate increase of
government spending on R&D boosts long-run productivity in the economy, thus
increasing the future value of firms, which is reflected in a desired
dividend increase. The households that would gain more utility from such
policy scenarios are those with more skilled and highly skilled labour, but
not the very top earners in the economy.
This paper analyses the developments in labor income taxation in Croatia, Slovenia and Slovakia during the period 2011-2017. While the systems of social insurance contributions in these countries were relatively stable, their personal income taxes have undergone more important changes. Using tax-benefit microsimulation models, we compute average and marginal tax rates for the sample units and assess the impact of tax-benefit systems on income distribution.
This paper analyses the importance of personal income tax and social security contributions in Slovenia and Croatia. Besides estimating the redistributive effects of these taxes it also includes estimates of income inequality measures. The results suggest that Croatia experiences greater income inequality among taxpayers compared with Slovenia.In both countries the tax system reveals only a limited difference between potential and actual redistribution. The results also indicate that some types of income -especially wages -contribute a constant and high proportion to the overall inequality seen in both countries during the examined period.
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