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Four proposals to increase the financing capacity of the state


  • Tamás Bánfi

    () (Corvinus University of Budapest, Budapest, Hungary)


The paper argues that in some specific cases the central Government, which is usually required to choose in between whether to maintain (improve) the competitiveness of the economy or to reduce governmental responsibilities, is able to manage the state budget without limiting its choice to one of the two alternatives. At present, in Hungary the possibility is given to increase tax revenues and concurrently increase competitiveness. The main discussion of the article is centered around four practical proposals intended to support the above statement: the necessity to create new jobs to (re)activate the inactive population the tax morale of the taxpayer to fulfill his obligations depends primarily on the propensity of other taxpayers to pay taxes, and therefore the abolition of the secrecy of tax declarations would improve tax morale and thus propensity to pay taxes corruption can be curtailed with strict restriction of cash payments the owners of incomes realized on domestic economic operations should not (only) pay taxes in tax havens and offshore areas, but in Hungary

Suggested Citation

  • Tamás Bánfi, 2010. "Four proposals to increase the financing capacity of the state," Society and Economy, Akadémiai Kiadó, Hungary, vol. 32(2), pages 221-228, December.
  • Handle: RePEc:aka:soceco:v:32:y:2010:i:2:p:221-228

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    References listed on IDEAS

    1. Zsolt Darvas & Jean Pisani-Ferry, 2008. "Avoiding a new European divide," Policy Briefs 227, Bruegel.
    2. Zsolt Darvas & György Szapáry, 2008. "Euro Area Enlargement and Euro Adoption Strategies," European Economy - Economic Papers 2008 - 2015 304, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    3. Jean Pisani-Ferry & Pavle Petrovic & Michael A Landesmann & Vladimir Gligorov & Daniel Daianu & Torbjörn Becker & Zsolt Darvas & André Sapir & Beatrice Weder di Mauro, . "Whither growth in central and eastern Europe? Policy lessons for an integrated Europe," Blueprints, Bruegel, number 453, August.
    4. Darvas, Zsolt, 2009. "Leveraged carry trade portfolios," Journal of Banking & Finance, Elsevier, vol. 33(5), pages 944-957, May.
    5. Zsolt Darvas & Zoltan Schepp, 2009. "Long maturity forward rates of major currencies are stationary," Applied Economics Letters, Taylor & Francis Journals, vol. 16(11), pages 1175-1181.
    6. Zsolt Darvas & Andrew K. Rose & Gyorgy Szapary, 2005. "Fiscal Divergence and Business Cycle Synchronization: Irresponsibility is Idiosyncratic," NBER Chapters,in: NBER International Seminar on Macroeconomics 2005, pages 261-298 National Bureau of Economic Research, Inc.
    7. Zsolt Darvas & György Szapáry, 2008. "Business Cycle Synchronization in the Enlarged EU," Open Economies Review, Springer, vol. 19(1), pages 1-19, February.
    8. Zsolt Darvas, 2009. "The Baltic Challenge and Euro-Area Entry," Policy Contributions 357, Bruegel.
    9. Zsolt Darvas, 2008. "Estimation Bias and Inference in Overlapping Autoregressions: Implications for the Target-Zone Literature," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 70(1), pages 1-22, February.
    10. John Lewis & Karsten Staehr, 2010. "The Maastricht Inflation Criterion: What is the Effect of European Union Enlargement?," Journal of Common Market Studies, Wiley Blackwell, vol. 48, pages 687-708, June.
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    More about this item


    tax increase; reduction of governmental expenses; employment; corruption; restriction of cash payments; outsourcing and PPP; offshore taxation;

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus


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