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Taxing top income earners in the Czech Republic: an IDEA for reform
Dušek, Libor ; Šatava, Jiří
The study brings new facts about the distribution of top incomes and the taxation of top income earners in the Czech Republic, derives optimal marginal tax rates on the top incomes, and proposes a specific systemic reform. The top one percent of the highest paid persons in the Czech Republic include those employees and business owners whose gross incomes exceed CZK 1,230 million per year. By international comparison, the Czech Republic exhibits low inequality of gross incomes. The top 10% of the income distribution accounts for 25.7% of total income, whereas in all developed countries for which comparable data is available this figure is significantly higher, between 28.2% and 46.3%. When it comes to the top one percent of the income distribution, the discrepancy compared with other developed countries is less pronounced. The top one percent accounts for 6.8% of total income, while for comparable countries it is between 5.4% and 19.7%.
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Working beyond pensionable age: institutional incentives in the Czech Republic
Šatava, Jiří
In this study, institutional incentives for the elderly to work are quantified by participation tax rate. All specifications of participation tax rate, which do not take into account unemployment benefits, show, that institutional incentives for the elderly to work are not higher compared to incentives for prime age individuals to work. Moreover, participation tax rates of pensioners used to be even higher compared to prime age individuals. This was the case in 2013 when working pensioners, who were receiving an old age pension, could not claim taxpayer tax credit. Therefore, pensioners' institutional incentives to work cannot offset their increased temptation to leave labour market.
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Working beyond pensionable age: institutional incentives in the Czech Republic
Šatava, Jiří
In this study, institutional incentives for the elderly to work are quantified by\nparticipation tax rate. All specifications of participation tax rate, which do not take\ninto account unemployment benefits, show, that institutional incentives for the\nelderly to work are not higher compared to incentives for prime age individuals to\nwork. Moreover, participation tax rates of pensioners used to be even higher\ncompared to prime age individuals. This was the case in 2013 when working\npensioners, who were receiving an old age pension, could not claim taxpayer tax\ncredit. Therefore, pensioners' institutional incentives to work cannot offset their\nincreased temptation to leave labour market.
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The profitability of pension system and impact of its reforms on men and women
Šatava, Jiří
Based on a representative database of 7,000 men and women, we calculate the profitability of the pension system for men and women and its changes due to "small" and "large" reform. Profitability is measured using an indicator of pension wealth as the difference between the present value of future pensions and future contributions to the pension system. Profitability for individuals varies according to gender, age, income level and other factors.
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Will you qualify for a pension?
Jurajda, Štěpán ; Šatava, Jiří
There is a chance that a part of the Czech population will not meet the basic prerequisite for being granted an old-age pension: 35 years of social security payments. Very likely, many social security payers are not aware of this threat, and have therefore not taken the option to secure their old-age pension through voluntary social security payments, or by extended participation on the labor market. This study tries to draw attention to this issue. Through simplified model simulation, we have shown that the group of people in danger of not receiving pension is non-negligible, and potentially includes tens of thousands of people. However, only a few thousand payers have opted for voluntary social security payments. Based on the data available to them, the Czech Social Security Administration should evaluate the scope of this issue and keep the payers informed, in a timely and regular manner, whether they actually qualify for an old-age pension.
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The impact of divorce on retirement income
Šatava, Jiří
Divorce has a considerable impact on the level of income of divorced men and women in retirement. Our analysis shows that divorced women lose an average monthly income in retirement corresponding to 7.1% of their monthly retirement pension. Conversely, men gain monthly retirement income at an average of 2.9% of their monthly retirement pension.
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Taxation of high incomes: reform after reform
Dušek, Libor ; Šatava, Jiří
Effective tax rates imposed on high-income taxpayers in recent years repeatedly changed from year to year, and this greatly tens of percentage points. The optimal marginal tax rate imposed on those with the highest incomes in the range 32-38 percent. A more appropriate tool to optimize the income tax is not a progressive tax rate, but maintaining the recently introduced solidary surcharge.
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