Reform of the Employee and Self-employed Income Taxation

Post-communist countries mostly realized the Hall-Rabushka tax plan from 1980's. It was close also in Czechia, but the expert of the neo-liberal party promised to decrease the personal income tax rate to 15 percent before the election and after the election, he did so in the position of the temporary finance minister by adding the employer-paid payroll taxes to this tax base. Today's finance minister wants, on the contrary, to abolish this so-called super-wage taxation in order to reduce taxation of wages only Similar reflections have always a wider impact primarily on the self-employed and on tax expenditures. It is therefore important to look at the overall analysis of the current Czech system of taxation and social security. That is the aim of this paper, including the resulting steps of rationalization of the employee and self-employed income taxation.