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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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    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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