0 tax that people must pay to the government themselves, especially income tax -- podatek bezpośredni
As the model highlights the role of fiscal policies to explain hysteresis, we also study the behavior of the direct tax rates.
Supplements to income tax became the principal source of local taxation, whereas taxation on property was the most important direct tax at a local level.
European experience seems to fit with the case where direct tax rates are used to balance the government budget constraint and different equilibria exist.
When government spending is treated as endogenous, direct tax rates are constant and, hence, exhibit an acyclical behavior.
It can be shown that both assumptions can be removed and yet the reference wage will decrease with the direct tax rate.
Thus, according to this model, those fiscal policies not using the direct tax rate to balance the government budget constraint are a superior fiscal policy.
The most significant innovations involved the direct tax.
We propose an alternative to the existing patent system, instead rewarding the innovating firm with direct tax credits in exchange for marginal cost pricing.
