Course detail

Tax theory

FP-FdtKAcad. year: 2022/2023

The history of tax and the development of tax theory (with special attention to the Czech lands), principles of taxation (especially the principle of fairness and efficiency), tax incidence, tax stimuli, the theory behind individual types of taxation (income, property, excise and quasi taxes), the basis of tax policy (tax quota and tax mix), tax theory in an international context (tax competition, coordination and harmonisation).

Language of instruction

Czech

Number of ECTS credits

3

Mode of study

Not applicable.

Guarantor

doc. Ing. Eva Lajtkepová, Ph.D.

Department

Institute of Finances (ÚF)

Learning outcomes of the course unit

Knowledge: The student can explain and describe tax principles. They can characterise the theoretical basis of individual types of tax. They can explain the theoretical basis for tax policy and the creation of tax systems in practice.
Skills: The student can independently search for, sort and interpret information concerning individual types of tax and tax system. They can weigh up the risks of tax changes in practice. They are able to assess the influence of tax on motivation to work and to save and on the investment activities of businesses.
General competences: The student can analyse economic reality and is able to link this reality to theoretical knowledge. They can continuously monitor, evaluate and predict the development of tax systems. They can apply knowledge from the subject in their future work as a professional in the financial management of a business.

Prerequisites

Knowledge on the level of bachelor’s degree studies from basic courses in macroeconomics and public finances, possibly public economics.

Co-requisites

Not applicable.

Planned learning activities and teaching methods

The lectures have the character of describing the basic principles, methodology and example problems.

Assesment methods and criteria linked to learning outcomes

Examination requirements:
The examination is in written form. Only students who have applied for it in the IS will be allowed to sit the examination. The examination contains both test and open questions. The length of the examination is 45 minutes, and the maximum possible score is 100 points, with a minimum of 50 points (i.e. 50 %) being needed in order to pass.
Classification is according to the BUT Study and Examination Regulations.

Course curriculum

The basic themes of the subject are as follows:
1. Conditions for completion of the subject. Introduction to the issues – definition of tax, the role and standing of tax in the economy, the function of tax, various approaches to the classification of tax, tax systems and their development.
2. The history and development of tax theory. The ancient and medieval periods, the creation of modern tax systems. Tax in the Czech lands. A brief summary of the development of tax theory.
3. Tax principles (fundamentals). Development and understanding of tax principles from ancient times to the present.
4. Tax justice, justice and distribution of income/wealth/consumption/talent. The benefit principle and the principle of ability to pay. Vertical and horizontal justice. The tax theory of sacrifice.
5. Tax efficiency. Administrative costs of taxation (direct/indirect), difficulty of their quantification. Income and substitution effects of tax. Excessive tax burden (dead weight loss - DWL) – the origin, factors influencing DWL. The size of DWL as a function of the substitution effect.
6. Tax incidence. Legal and real impact of tax. Tax incidence on various markets (competitive market, oligopolistic and monopolistic environments). Factors influencing tax incidence.
7. Income tax – characteristics, significance, history, properties, productivity. Income tax as an instrument of economic policy. Personal income tax, corporation tax. Progressive taxation. Negative income tax.
8. Quasi tax. Social insurance premiums – characteristics, significance, history, properties, productivity. Distortions of the labour market. Effective gross income.
9. Property taxes - (de)merits of property taxes, characteristics, history and productivity. Types of property tax – one of and repeated tax payments. Advantages and disadvantages of property taxes.
10. Consumption taxes – characteristics, significance, history and productivity. Taxes in general – advantages and disadvantages (resistance to tax evasion, reliability of revenues v. administrative demands). Selective taxes – advantages and disadvantages.
11. Basis of tax policy. Tax quote and tax mix, division of countries by main tax sources. Optimum taxation. International comparison of tax quotas, explanatory power of indicators. Factors influencing tax systems. Tax evasion.
12. Tax and the labour market – influence of taxation and various taxes on motivation to work, effects of tax and payroll tax. Influence of tax on investment – investment risks. Tax and household/company savings. Tax and state savings.
13. Comparison of countries from the perspective of tax systems. Tax competition, coordination and harmonisation. Tax reforms.

Work placements

Not applicable.

Aims

The main aim of the subject is to equip master’s students with an advanced knowledge from the area of tax theory and to apply this knowledge to specific tax systems.

Specification of controlled education, way of implementation and compensation for absences

Participation in the teaching according to the semester timetable is recomended. In the course of the semester students have available 26 hours of consultation with the teacher.
 


Recommended optional programme components

Not applicable.

Prerequisites and corequisites

Not applicable.

Basic literature

GRUBER, J. Public finance and public policy. 5th ed. New York: Worth Publisher, 2016. (EN)
JACKSON, P. M. a C. BROWN. V. Ekonomie veřejného sektoru. 1. vyd. Praha: Eurolex Bohemia, 2003. (CS)
KUBÁTOVÁ, K. Daňová teorie a politika. 7. aktual. vyd. Praha: Wolters Kluwer, 2018. (CS)
ŠIROKÝ, J. Základy daňové teorie s praktickými příklady. 1. vyd. Praha: Wolters Kluwer, 2015. (CS)

Recommended reading

DOLEŽALOVÁ, A. Rašín, Engliš a ti druzí. 1. vyd. Praha: VŠE v Praze, Nakladatelství Oeconomica, 2007.
GRÚŇ, L. Vybrané kapitoly z historie daní, poplatkov a cla. 1. vyd. Olomouc: UP v Olomouci, 2004.
MUSGRAVE, R. a P. MUSGRAVEOVÁ. Veřejné finance v teorii a praxi. 1. vyd. Praha: Management Press, 1994.
ROSEN, H. S. a T. GAYER. Public Finance. 10th ed. New York: McGraw-Hill Education, 2014.
VANČUROVÁ, A. a L. LÁCHOVÁ. Daňový systém ČR 2020.  Praha: Wolters Kluwer, 2020.

Classification of course in study plans

  • Programme MGR-KS Master's

    branch MGR-UFRP-KS-D , 1 year of study, winter semester, compulsory

  • Programme MGR-UFRP-KS Master's 1 year of study, winter semester, compulsory

Type of course unit

 

Guided consultation in combined form of studies

12 hod., optionally

Teacher / Lecturer

doc. Ing. Eva Lajtkepová, Ph.D.

Syllabus

The basic themes of the subject are as follows:
1. Conditions for completion of the subject. Introduction to the issues – definition of tax, the role and standing of tax in the economy, the function of tax, various approaches to the classification of tax, tax systems and their development.
2. The history and development of tax theory. The ancient and medieval periods, the creation of modern tax systems. Tax in the Czech lands. A brief summary of the development of tax theory.
3. Tax principles (fundamentals). Development and understanding of tax principles from ancient times to the present.
4. Tax justice, justice and distribution of income/wealth/consumption/talent. The benefit principle and the principle of ability to pay. Vertical and horizontal justice. The tax theory of sacrifice.
5. Tax efficiency. Administrative costs of taxation (direct/indirect), difficulty of their quantification. Income and substitution effects of tax. Excessive tax burden (dead weight loss - DWL) – the origin, factors influencing DWL. The size of DWL as a function of the substitution effect.
6. Tax incidence. Legal and real impact of tax. Tax incidence on various markets (competitive market, oligopolistic and monopolistic environments). Factors influencing tax incidence.
7. Income tax – characteristics, significance, history, properties, productivity. Income tax as an instrument of economic policy. Personal income tax, corporation tax. Progressive taxation. Negative income tax.
8. Quasi tax. Social insurance premiums – characteristics, significance, history, properties, productivity. Distortions of the labour market. Effective gross income.
9. Property taxes - (de)merits of property taxes, characteristics, history and productivity. Types of property tax – one of and repeated tax payments. Advantages and disadvantages of property taxes.
10. Consumption taxes – characteristics, significance, history and productivity. Taxes in general – advantages and disadvantages (resistance to tax evasion, reliability of revenues v. administrative demands). Selective taxes – advantages and disadvantages.
11. Basis of tax policy. Tax quote and tax mix, division of countries by main tax sources. Optimum taxation. International comparison of tax quotas, explanatory power of indicators. Factors influencing tax systems. Tax evasion.
12. Tax and the labour market – influence of taxation and various taxes on motivation to work, effects of tax and payroll tax. Influence of tax on investment – investment risks. Tax and household/company savings. Tax and state savings.
13. Comparison of countries from the perspective of tax systems. Tax competition, coordination and harmonisation. Tax reforms.