Tax system economics

From a theoretical and practical point of view, we are taking you in this book on an intellectual journey where we will present taxes and the tax system in economic terms. We understand tax system economics as the overall governance of a country’s or integration grouping’s revenues and public expenditure aimed to create a smart economic policy that stimulates economic growth and development, and safeguards against the functional risk to the current and next generations. We present a theoretical tax system model and its reflection in the global economy, or a division of the tax system into productive and non productive fiscal and redistributive functions. We discuss respective types of tax which are of greatest importance to the economy, offering an extensive methodological and systematising study on the economic analysis of the tax system, including an economic analysis of law. Next, we present behavioural economics and its application in the tax system, showing a model of mental accounting relating to the Decision to pay tax according to Richard Thaler. Then, we demonstrate the tax system’s efficiency taking account of social welfare, trust in authorities and the power of the authorities. Last but not least, we try to present, based on research into innovation and tax system of the future, the clash of developed economies with the new reality of developing economies as well as changes facing tax systems in the accelerating process of digitalisation and robotisation. *** This book could not have been more timely. As countries emerge heavily indebted from the pandemic, many governments will be scrutinizing their tax systems in search of new sources of revenue.

Spis treści

Foreword 7 Chapter I. The role of taxes and tax system in economic science 11 Introduction 11 1.1. The tax system as an economic category 13 1.2. The economic concept of tax and tax system 15 1.3. Principles of taxation 19 1.4. Goals of tax system 24 1.5. Tax system models 28 1.5.1. A neutral tax system model 35 1.5.2. A stimulating tax system model 36 1.5.3. A theoretical tax system model addressing the challenges of the contemporary economy 38 1.6. National tax policy in the global economy 42 1.6.1. Macroeconomic governance of a tax system 47 1.6.2. Global tax governance 49 Conclusions 54 Chapter II. The tax system in the economy 57 Introduction 57 2.1. A tax system that fosters economic growth and development 59 2.2. Fostering prosperity and limiting social exclusion 72 2.3. Public tax administration 84 2.4. Significance of taxes in the economy 88 2.4.1. Personal income tax 94 2.4.2. Corporate income taxes 101 2.4.3. The role and importance of consumption taxes 106 2.4.4. The role of property taxes 111 Conclusions 115 Chapter III. Economic analysis of tax system 117 Introduction 117 3.1. The tax system in a theoretical macroeconomic analysis 119 3.2. The tax system in a practical macroeconomic analysis 130 3.3. The tax system in a simplified financial analysis 144 3.4. An economic analysis of taxation and of informal economy 149 3.4.1. Tax system and the shadow economy 149 3.4.2. A research approach to estimating the shadow economy 154 3.5. Economic analysis of law in tax system and economic policy 157 3.5.1. The research concept and methodology in economic analysis of law 160 3.5.2. Criticism of economic analysis of law—pros and cons 166 Conclusions 168 Chapter IV. Behavioural economics in the tax system 171 Introduction 171 4.1. Why behavioural economics in taxes? 173 4.2. Power and trust in the tax system—a social or economic problem? 177 4.3. Social and economic variables driving tax behaviours 182 4.4. The decision-making architecture in the tax system—the nudging strategy 187 4.5. Behavioural tools and technique in the tax system 192 4.6. Tax system effectiveness—verifying the mainstream economics paradigm 197 4.7. Suggested tax system efficiency model 204 Conclusions 208 Chapter V. Tax system economics of the future 209 Introduction 209 5.1. A tax system oriented to the growth and development of innovative economy 210 5.1.1. The impact of the tax system on a highly-innovative economy 225 5.1.2. Adequacy of the solutions used in tax systems for the growth rate in innovative economy 231 5.1.2.1. Impact of taxes on the annual GDP per capita growth 231 5.1.2.2. Gross fixed capital expenditure 235 5.1.2.3. Gross R&D expenditure 238 5.1.2.4. New technology exports 241 5.1.2.5. Gross domestic savings 244 5.1.2.6. Foreign direct investments 246 5.1.2.7. Number of researchers 247 5.1.3. Taxpayer acceptability of the tax burden amount 249 5.2. Globalisation, digitalisation and tax system 250 5.3. Robotisation and tax system 258 Conclusions 262 Summary 265 Bibliography 269 List of tables 313 List of figures 315