The dominance of indirect taxes in Estonian state budget. Summary:Kaudsete maksude dominant Eesti riigieelarve tuludes

Olev Raju

Abstract


Recession has sharply erected the question of tax burden and the optimal proportion of different kinds of taxes among the incomes of the budget. Indirect taxes and consumption taxes, which proportion is different according to different methodologies, dominate in Estonian state budget. The buoyancy of a tax system based on taxes of that kind is especially weak during the recession. The purpose of Estonian government’s economic policy during the highest peak of crisis was to keep the budget in balance. Instead of recovering economy the taxes were arisen and costs were reduced. The results of such a policy aren’t still clear. Difficulties concerning the incomes of budget have arisen the necessity for lifting taxes, which is possible as the tax burden is low now. But a sharp question of the optimal level of taxes is going to be raised. A formula for indirect tax optimum according to Ramsey taxes and Slutski decomposition has been proposed in the article

Keywords


Taxation; tax burden; Estonian state budget; Ramsey taxes; indirect tax optimum

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DOI: https://doi.org/10.15157/tpep.v21i1.1069



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