|Case: “Rovna Dan: The Flat Tax in Slovakia”, Harvard Business School case no. 9-707-043, March 2010|
Textbook Reading: Chapter 7 (Intro, Section 7.1 and 7.2; pp. 199-216) and Chapter 12 (Section 12.1; pp. 399-403)
When talking about macroeconomics I think it’s important to distinguish between the overall economy and the circumstances of an individual firm. We can’t always assume that macro conditions are felt the same by each company within it. I explain more in this video:
In 2011 the Mirrlees Review published ‘Tax by Design‘, a comprehensive overview of UK tax reform.
In terms of a flat tax, here is a short video asking “Would a Flat Tax Be More Fair?” There’s a good HBS article, from 2007, called “All Eyes on Slovakia’s Flat Tax”. Slovakia repealed the flat tax in 2013, which you can read about on this LSE Blog: “Slovakia has abolished its flat tax rate, but other Eastern and Central European countries are likely to continue with the policy.”
Here are some newspaper attempts to explain fiscal implications of tax policy:
Regarding public finance more generally, in 2012 I participated in the 2020 Tax Commission. You can read our report here.
Regarding tax compliance, you may hear things like:
Apple can pretty much choose how much tax it wants to pay and to whom. One EU estimate was that it paid less than 0.01% tax on profits of over $100 billion (Frisby 2019, p.175)
This may be true, but it doesn’t mean that tax is voluntary. The choice that Apple have is over what activities they undertake, each of which have different tax implications. So they can affect their tax obligations, but only in as much as they alter their business decisions.
|Group activity: Personal Taxation, December 2020|
This page ties into Chapter 7 of Economics: A Complete Guide for Business
|Learning Objectives: Understand alternative types of tax regime.
Focus on diversity: Harriet Martineau (1802-1876) is best known as a pioneer of sociology, but contributed to the populising of classical economic insights on taxation.