The flat tax in Romania. A good economic strategy?
AbstractThis paper evaluates the main effects of the implementation of tax flat system in Romanian economy. If accompanying measures are not going to be enforced, the introduction of the flat rate of 16% in Romania will lead to unsustainable budgetary deficits and inflationist pressures. The flat tax favors the workers with big salaries and also big and financially solid companies (which, mainly “export” the profit). It will attack the fragile macroeconomic stability. It is uncertain if it will lead to the increase of the degree of employment, having in view the fact that the contributions to the social insurances have a very high level. The alternative scenario is simple. Romania should have chosen to continue what it was confirmed to be a valid element of the economic evolution towards a European standard (progressive fiscal system).
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 3166.
Date of creation: 05 Apr 2007
Date of revision:
flat tax; fiscal policy; inflation; AD-AS model;
Find related papers by JEL classification:
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
This paper has been announced in the following NEP Reports:
- NEP-ACC-2007-05-12 (Accounting & Auditing)
- NEP-ALL-2007-05-12 (All new papers)
- NEP-MAC-2007-05-12 (Macroeconomics)
- NEP-PBE-2007-05-12 (Public Economics)
- NEP-TRA-2007-05-12 (Transition Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Michael Keen & Alexander Klemm & Anna Ivanova, 2005.
"The Russian Flat Tax Reform,"
IMF Working Papers
05/16, International Monetary Fund.
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