tag:blogger.com,1999:blog-36596111.post8047236441938468300..comments2009-09-21T11:07:15.010+02:00Comments on Hungary Economy Watch: Tax Revenue UpUnknownnoreply@blogger.comBlogger1125tag:blogger.com,1999:blog-36596111.post-88595133374895449992007-07-28T00:27:00.000+02:002007-07-28T00:27:00.000+02:00Tax evasion can be a great prisoner's dilema game....Tax evasion can be a great prisoner's dilema game. Many people do not pay taxes, the government has to rase rates among taxpayers and public services will lack financing. Over a longer period of time people may think that they buy health services on the market (or black market) and do not pay tax and social security at all.<BR/><BR/>The government seems to have succeeded to break this vicious circle with a very strong penalty: those who don't pay tax will be excluded from the universal health coverage.<BR/><BR/>The public finances are still not bright, but taxpayers cannot maintain their living standards at these extremely high rates. The people do not seem to think that these tax rates are feasible: the sharp decline in real wages did not result in a sharp decline in domestic demand as people took on huge amounts of loans. The policy-maker has to find the point when enough new taxpayers are drown into the system and it can give a positive motivation to remain a taxpayer (either with lower tax rates or better public services), otherwise people may swith back into the illegal economy in large numbers. <BR/><BR/>On the migration part I have not seen any signs of higher outbound migration from Hungary.Antal Dánielhttps://www.blogger.com/profile/13982036207587080662noreply@blogger.com