Aarhus Universitets segl

Flat-rate personal income tax in Lithuania, Romania and Hungary: A revolutionary policy idea without revolutionary outcomes

Publikation: Bidrag til tidsskrift/Konferencebidrag i tidsskrift /Bidrag til avisTidsskriftartikelForskning


  • Borbála Kovács

A decade of writing on the politics of flat-rate tax adoption and diffusion across post-socialist Europe and Asia has presented these reforms as revolutionary, but at least bold. However, in what ways they might have proven so and for whom has not been investigated. Based on a micro-level study of actual personal income tax rates for the 1991–2018 period, the article engages critically with the scope of the flat tax ‘revolution’ in three different flat tax nations, early adopter Lithuania, later-adopter Romania and recent-adopter Hungary. The analysis shows that the introduction of flat-rate tax in no way revolutionised actual tax burdens for the majority of earners, not even for high-income earners, whose tax burdens had been declining for at least a decade before the arrival of flat tax in both Romania and Hungary. The article also reveals the crucial role played by standard tax credits in shaping tax regime progressivity not only in flat tax regimes, but also progressive ones. The article suggests that the novelty of policy ideas cannot be assumed, but needs to rest on comparisons of outcomes.

TidsskriftJournal of European Social Policy
Sider (fra-til)60-74
Antal sider15
StatusUdgivet - feb. 2022

Se relationer på Aarhus Universitet Citationsformater

ID: 229825015