The effects of tax rates and corruption on tax revenues International comparison on OECD countries, Mária Lackó Institute of Economics, Hungarian Academy of Sciences

Outline 1.My approach: the effect of tax rates on the labor market and on tax revenues are investigated in their combination with the effect of corruption 2.The effects of the labor tax rates combined with corruption on various segments of the labor market - employment rate - hidden economy ??? - self-employment rate 3.The effects of labor tax rates combined with corruption on the tax revenues 4.Shortfalls in tax revenues due to high tax rates with high level of corruption: related share is an indicator of the hidden economy

Tax wedge and corruption in the OECD countries, 2004

Tax wedge and employment rate, OECD countries, 2003

Tax wedge combined with corruption and the employment rate, OECD countries, 2003

Regressions explaining the size of the hidden economy

Regression equations explaining the self-employment rate, OECD countries

Tax wedge in Hungary,

Tax wedge and tax revenues, OECD countries, 2004

Tax wedge combined with corruption and the tax revenues, OECD countries,

Regressions explaining the tax revenues, OECD countries

Share of the tax shortfall from the labor taxes, %

Tax wedge combined with corruption and the tax revenues, OECD countries,

Tax wedge combined with corruption and tax revenues, OECD countries, 2004

Regressions explaining the tax revenues, OECD countries

Share of the tax shortfall from the tax revenues (income, social contr., consumption)

Shortfalls in tax revenues, % of GDP (2004)